22-03-2022, 07:55 PM
When the pandemic struck we had a massive rally because the FED cut rates and did asset purchase.
Now both these factors are reversed a d removed, the liquidity is drain from the markets yet pundits cheer this maarket going higher.
If you get fat eating too much, these experts are saying you will still get fatter if you stop eating.
Problem is logic in the market sometimes does not kick in immediately causing investors to think that logic can be defied.
If the market run up too quickly from now, it will be like in 1987 all over again. Yes most of us won't know because we were not born or young children at that time.
What happened was interest rate rose rapidly and investors did not care and kept piling in to buy stocks causing the surge up to continue. That was until Oct 1987...the market collapsed 26% in one day. After that it took yrs to recover.
The Dow surge up almost 30% to its peak then crashed. The interest rate rose during this period as to Dow climbed.
Now both these factors are reversed a d removed, the liquidity is drain from the markets yet pundits cheer this maarket going higher.
If you get fat eating too much, these experts are saying you will still get fatter if you stop eating.
Problem is logic in the market sometimes does not kick in immediately causing investors to think that logic can be defied.
If the market run up too quickly from now, it will be like in 1987 all over again. Yes most of us won't know because we were not born or young children at that time.
What happened was interest rate rose rapidly and investors did not care and kept piling in to buy stocks causing the surge up to continue. That was until Oct 1987...the market collapsed 26% in one day. After that it took yrs to recover.
The Dow surge up almost 30% to its peak then crashed. The interest rate rose during this period as to Dow climbed.