Longest Bull Market in History

joe sod

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790
@Paul O Mahoney , it's important to remember the bull run in the US is really being driven by the few faang stocks, Apple Amazon etc, strip that out and it takes away a lot of the performance of the US markets. I drew attention to the valuation of Apple being now greater than the total US energy sector.
What could derail this bull market?, the unexpected return of inflation and the rise in interest rates although that would also cause carnage in the bond markets.
 

Paul O Mahoney

Registered User
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41
@Paul O Mahoney , it's important to remember the bull run in the US is really being driven by the few faang stocks, Apple Amazon etc, strip that out and it takes away a lot of the performance of the US markets. I drew attention to the valuation of Apple being now greater than the total US energy sector.
What could derail this bull market?, the unexpected return of inflation and the rise in interest rates although that would also cause carnage in the bond markets.
If we knew what might "derail " the market wed all be shorting it. The fact is anything might derail it, a downgrade of a dow heavy stock, something like a revenue over statement of one of the Fangs, liquidity it's a long list. And history has shown us that problems in the US market are only made known when the problem is to big to stop.

There are some commentators both here , Europe and in the US that the US economy might enter recession from June....they might be right or not.
My personal view that balance sheets are more important that P&Ls and Corporate Americas balance sheets are debt ridden.

And let's be honest here most trades on the stock market are done in dark pools places that the retail investor never gets to see, we know that these have been used to manipulate stock prices and they usually get information a long time before anyone else.

It's a very complex market with multiple risks and opportunities but it never fully understood.

My thoughts
 

joe sod

Frequent Poster
Messages
790
There are some commentators both here , Europe and in the US that the US economy might enter recession from June....they might be right or not.
My personal view that balance sheets are more important that P&Ls and Corporate Americas balance sheets are debt ridden.
But these commentators have been predicting recession for a long time now as far back as 2015,even last year they said the recession was definitely happening as "the yield curve had inverted" and that is a definite precursor to a recession , it didn't happen. Using bond yields as a precursor to recessions obviously no longer works in the era of negative interest rates and central banks buying bonds on a massive scale.
With regard to corporate debt,what does it matter if corporates have alot of debt now,its all issued at low or negative interest rates. The example of Apple a company stuffed with cash issuing bonds illustrates this perfectly.
In any case I would not be investing in any FAANG stocks now,thats where the overvaluation is, you could always invest in global ex US etfs,they have only started to perform now. You could definitely not be accused of investing in overpriced markets there.
 

Sunny

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3,673
But these commentators have been predicting recession for a long time now as far back as 2015,even last year they said the recession was definitely happening as "the yield curve had inverted" and that is a definite precursor to a recession , it didn't happen. Using bond yields as a precursor to recessions obviously no longer works in the era of negative interest rates and central banks buying bonds on a massive scale.
With regard to corporate debt,what does it matter if corporates have alot of debt now,its all issued at low or negative interest rates. The example of Apple a company stuffed with cash issuing bonds illustrates this perfectly.
In any case I would not be investing in any FAANG stocks now,thats where the overvaluation is, you could always invest in global ex US etfs,they have only started to perform now. You could definitely not be accused of investing in overpriced markets there.
People have been saying that FAANG stocks (God, I hate that this is now a thing) have been overvalued as long as people have been predicting recession.
 

Paul O Mahoney

Registered User
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41
But these commentators have been predicting recession for a long time now as far back as 2015,even last year they said the recession was definitely happening as "the yield curve had inverted" and that is a definite precursor to a recession , it didn't happen. Using bond yields as a precursor to recessions obviously no longer works in the era of negative interest rates and central banks buying bonds on a massive scale.
With regard to corporate debt,what does it matter if corporates have alot of debt now,its all issued at low or negative interest rates. The example of Apple a company stuffed with cash issuing bonds illustrates this perfectly.
In any case I would not be investing in any FAANG stocks now,thats where the overvaluation is, you could always invest in global ex US etfs,they have only started to perform now. You could definitely not be accused of investing in overpriced markets there.
I wouldn't be buying that class of share either, but one of my closest friends started work with Apple in 1988, 5% of salary forgone since then to buy shares......hes doing alright and has another 15 years left.
 

Sunny

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3,673
I wouldn't be buying that class of share either, but one of my closest friends started work with Apple in 1988, 5% of salary forgone since then to buy shares......hes doing alright and has another 15 years left.
Nice one. Although I did the same when I joined an Irish bank in the 1990's...…:(!!!
 

joe sod

Frequent Poster
Messages
790
I wouldn't be buying that class of share either, but one of my closest friends started work with Apple in 1988, 5% of salary forgone since then to buy shares......hes doing alright and has another 15 years left.
It's a good way of saving, I bet he has a large amount now invested in Apple. However it is never a good idea to have a large amount of your net worth tied up in one stock. I saw the same thing happening during the dot com boom and bust, guys working in the technology and telecoms companies saw their share options sky rocket in value. Even though they were smart highly educated guys they still got wiped out during the tech bust and on top of that some lost their jobs as well. This period is largely forgotten about in Ireland largely because it was eclipsed by the later property crash
 

Paul O Mahoney

Registered User
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41
Corporate debt is an issue actually corporate debt is a massive issue. Interest rates a
Nice one. Although I did the same when I joined an Irish bank in the 1990's...…:(!!!
Sister in law same joined about that time too, not a bean left.
 

EmmDee

Registered User
Messages
288
It's a good way of saving, I bet he has a large amount now invested in Apple. However it is never a good idea to have a large amount of your net worth tied up in one stock. I saw the same thing happening during the dot com boom and bust, guys working in the technology and telecoms companies saw their share options sky rocket in value. Even though they were smart highly educated guys they still got wiped out during the tech bust and on top of that some lost their jobs as well. This period is largely forgotten about in Ireland largely because it was eclipsed by the later property crash
c.f. Enron
 
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