Wednesday, February 25, 2015

The Stock Market =/= Economy (Part 2)

Again, I needed to remind myself today that the stock market is not the economy.


Unlike Chairwoman Yellen, I think that the future is bleak.


If you've never seen someone doing live impromptu bulls***, you definitely have to watch Yellen's testimony. I cringe hearing her roundabout answers.

In Nov, I presented my slew of bearish indicators. I've been stressing US market overvaluation over and over and over again.

I think it's safe to say that I am an outright bear now. Of course, it is entirely possible for these levels of valuations to persist or even increase. No one said that the market was rational. A whole lot of patient people that I read and follow are cautioning against these extreme valuations. If I am not wrong, at current prices, the only other time in history that valuations were this rich was during the dotcom bubble.

Oh boy, did that end well, right? It painful watching this car crash in slow motion.

You know the rain dance? This is my bear dance.


Unfortunately for older people with more aggressive allocations, a massive bear market is one of the best things that can happen for young investors brave enough to seize the scary opportunity.

Anyway, I am just a small fish in this big ocean. I'm just a price taker, not a market mover.

4 comments:

  1. You are absolutely right. For those of us who missed out on the 2008 bear either because we had not started working or worked long enough to accumulate a decent amount of savings, the next bear will be a massive opportunity.

    ReplyDelete
    Replies
    1. Hopefully we have the bravery and capital to make the best of such an opportunity!

      Delete
  2. The next bear market will be a big opportunity, but I'm also wary -- that I might lose my job if the economy takes a downturn!

    ReplyDelete
    Replies
    1. Aye J, that is probably the main concern actually! If we can manage to get through without losing our jobs and be brave enough to step in, the rewards would be quite handsome, I imagine!

      Delete

Observe the house rules.