Wednesday, October 14, 2015

4 Warning Signs of the US Stock Market

Taken from Zerohedge: 4 Warning and Why You Should Pay Attention. (with some charts from dshort instead because I think it looks clearer)

These are the 4 things that you might want to look at:
1) Profit margins
2) Margin debt
3) Valuations
4) Economic output


Jesse Felder also looks through the lens of history and wrote a great piece about market valuations. I would encourage a look see.

I don't believe in endless economic expansion and the never ending upward trajectory of the stock markets.


As a disclaimer, I am shorting the S&P500 index through CFDs because I'm bored out of my mind picking my toes and looking at the ceiling. The past few weeks watching the markets have been tremendously boring.

2 comments:

  1. Hi GMGH,

    Can I find out which broker you're using for the CFDs, and whether you have one to recommend?

    Thanks!

    ReplyDelete
    Replies
    1. Hi Anon,

      I use CMC markets and they are the only CFD broker that I've had a live account with. I did try a demo account with Oanda but I didn't like it.

      I lost a ton of money playing with CFDs when I first started "investing". In all honesty if I could rewind my life, it is one thing I wish I hadn't dabbled in. I don't think you need to have any knowledge of CFDs to be a successful long run investor. It really is for short-term speculation, or otherwise known as gambling.

      I still vote to stay clear of it. My money in my CFD account is so I don't do dabble in other similar deviant things like online casinos, sports betting, etc. I'm just going with the lesser evil now.

      Delete

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