Please make the case that we aren’t in a bubble & this stock market isn’t about to pop

likefunny
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What goes up must come down but unless youre looking to retire in 5 years I wouldn't worry about it. Its all about long term growth

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2001 and 2009 were wonderful times to buy stocks.
Bubbles certainly burst then.
Yes it took 10 years for the stock market to break into a higher range after 2001. But the long terms returns for anyone buying at that time are marvelous!

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Research shows that reliably knowing how the market will move in the future isn't possible and investors are better off holding strategic allocations.

There, I made the case.

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Sp500 doubles roughly every 7 years. We are on pace for that over the last rolling 7 year period.

However these last 7 years we had an excessive amount of money printing. Estimates put as little as 30% extra dollars printed over that period to as much as 400%.

Meaning sp500 share price should be 1.3x-5x what it normally is as a result.

Meaning the stock market is likely undervalued by a decent margin.

Add increase to value provided to businesses by advances in robotics and ai. My thesis is this bull run has barely started.

likefunnyuplifting

I like your thesis! I don’t believe it, but I like it!

likeupliftingfunny

Lever in to doge coin in anticipation of Elon’s next tweet.

likefunny

To the moon!

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The book "The Psychology of Money" has one of the most useful definitions of a bubble that I've found. I'd suggest you start with that.

likehelpful

We are not in a bubble. But I do expect a decent pullback in Q1 next year, if stocks continue to rally until year end.

likesmartfunny

Why?

Foreclosures are on the rise, and this will “reset” the costs of housing. As far as markets goes, American corps are doing well. Hedge against foreigners. America #1

likefunny

Car repos are on the rise too, another affordability red flag that will influence a "reset"

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We literally got rid of bubbles after 2008, won't happen

funny

Bro, houses are literally renovated and then sold for “tenfold.” First time consumers are getting scammed. There is a bubble from that regard, hence foreclosures.

smartlike

The bull case likely relies on significant productivity gains from AI. If the economy can grow 3%+ for several years we are in good shape.
Let’s pray for AI to replace or significantly alter most of our jobs, and stocks will be in great shape.

funny

bubble or not - know what you’re buying. diversify, don’t put all eggs in the same basket. play the long game. avoid leverage. stick to the basics. sleep peaceful.

likehelpful

we’re not in a bubble

funny

Thanks for confirming👍

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Best FIRE advice is to pick a mix of total stock and total bond and ride out the waves. I believe we're in a bubble, but the problem is always timing. The market trend is generally up and if you're looking long-term it's best to have money in the market. Experts have been predicting the bubble will pop for the last 3 years, and if you took your money off the table then, would you be better or worse off today?

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because the the AI tech is already paying off and it's a tangible product to sell vs. for example the .com bubble where it was the expectation of tech that never materialized....

likefunny

PE ratios suggest otherwise

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You should explain your premise first because it sounds like you're missing some basic things brah.

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well whatever the reasons were for "caring" about CAPE, it's what they call a "you problem" and reveals financial illiteracy more than anything else

Here is a good overview of several iconic experts take on where we are and what is coming. Way more informed and informative than what any of us Fish Bowlers would say. From memory, Darius Dale says we’re not about to pop. These people are not pushing any products. https://youtu.be/68m3FghZIQo?si=2Z_m9RLacxYiLhfG

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Fair warning, they don’t all agree. That’s why we diversify.

smartlike

There’s a realistic world where AI adds 5-10%+ of ebitda for companies for the next decade as staff costs drop

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There are very few examples yet where AI investments are improving operations meaningfully.

likesmart

It probably looks like a ziggurat. That's a pyramid with many down steps, flatlines and then up ticks. Think of it as a downward staircase that then will go up again.

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Nobody knows anything. Market will fluctuate as always.

Watching the newspapers change headlines as futures move day to day is illuminating. It’s a fractal, same thing happens month to month and year to year and so on. It only seems smart in retrospect.

If things go down, it will have been an obvious bubble. If up, “market climbs a wall of worry”. All pointless, ignore it.

We don’t have bubbles anymore. We have chronic expansion of money supply and government deficit instead. These other things don’t pop or revert.

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