That’s quite some pub you go to. I only ever hear football talk.
Market trends - stock market
- Thread starter galway_blow_in
- Start date
This is standard from efficient markets theory.
This on the other hand shows a fundamental misunderstanding of efficient market theory. Which would say that your view, my view or any expert view are equally irrelevant because the market prices efficiently. Indeed the chief investment officer of Goldman is worse given his enormous salary.
galway_blow_in
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One that hopefully avoided sensationalist hyperbole
Now, the markets are efficient only if proper research and due diligence are done on investments. That provides part of the information that drives the efficiency of the market. I would argue (or maybe it's part of the theory and I've just forgotten) that markets are not efficient in the short term, but are over medium and long terms. Imperfect information can lead to inefficiencies, and active fund managers will tell you they can exploit these. I can see this arguement for small cap funds where there is less research and less information.
The Efficient Market Hypothesis (it never even got as far as becoming a Theory) is far from universally accepted.
Efficient-market hypothesis - Wikipedia
Were these opportunistic purchases or very recent ones ? Surely any government bonds bought during the COVID period and before it are down significantly in price as interest rates have shot up. There were lots of predictions that maybe we were at the peak of the interest rate cycle, the last week has proved otherwise.
Jay Powell of the fed said that they are still trying to shake off the effects of COVID, there are still supply disruptions, employers cant get workers, parts etc and the consumer is still very strong. So they are going to need alot higher interest rates to try and halt inflation. That's really bad for bonds and stocks but especially bonds
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No idea what is being discussed here
It a free form discussion of trends in the stock market taking care to stay within the posting guidelines.
I know any form of discussion which is not strictly 'on-topic' is anathema to many people but some of us are enjoying this.
basilbrush
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Nothing that we don't already know and that hasn't been discussed many times before, but still a possibly relevant read: https://www.telegraph.co.uk/busines...ding-another-black-monday-stock-market-crash/
Actually it's something that is not widely discussed on this site, the last one was in 2020 when the market was crashing. That turned out to be a real time snapshot of what people do in a stock market crash, the panic is real
Also it is interesting from an Irish perspective which also doesn't get that much discussion except when there are big things happening like the banking collapse.
Also due to the adverse taxation of ETFs here investors in Ireland are more likely to be buying shares directly and are more susceptible to market crashes than to ride them out in the relative safety of a broad spectrum ETF
It took a while, but it eventually got on message "Tories good, Thatcher great, unions bad"
basilbrush
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They were certainly not subtle with that message.
I am not sure that I agree with their assessment that the West has been enfeebled over the past 15 years. I think 15 years ago it felt more obvious to me that Asia was going to overtake it than it does now. So, while I think that inflation will need to remain high for Western governments to inflate their debt away, and I expect the money printers to continue to go brrrr, and I wouldn't be surprised if there were substantial falls in asset values (despite the inflation and money printing), it feels to me like there is no alternative for global investors except to continue to invest in the West, so I am in fact more confident that things will be fine for investors in the West over the long term than I was in the past.
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Even though the indices don't seem to be reflecting this but a large number of stocks have fallen alot in last few months. Obviously high interest rates are feeding through now to the general markets. The main indices seem to be holding up due to presence of the few mega stocks . The traditional high yielding stocks are suffering due to the comparison with bonds and their relatively high yields now. But the bond markets have had their worst performance in a century due to the very rapid rise in interest rates from their all time lows
Big change since that last post, stocks across the board up alot. It's actually not the tech stocks that are really performing but the old world stuff in Europe and UK that generates income now. Of course european stock markets helped by the new mega cap nova nordisk with their block buster weight loss drug. Alot of it seems to be that stocks that generate income are back in fashion since they compensate for inflation and are able to raise the price of their products
So stock markets have continued to perform even since 2024, first they shook off the trump tarriff tantrum from a year ago and now amazingly they have shook off the strait of hormuz closure and the big hike in oil prices.
Also we have some of the central bank leaders warning that the stock markets are too complacent about the iran war shock and should be down alot more. I have never heard that before from the central bank governors trying to talk down the stock markets that is new. Also the stock markets are largely ignoring them .
However it is the bond markets that are really suffering through all this, normally this is the market investors run to in times of trouble but now they are running away from bonds. It could be that they are moving money from bonds to stocks since at least stocks offer some protection from inflation. This is what must have the central banks so worried.
Also we have some of the central bank leaders warning that the stock markets are too complacent about the iran war shock and should be down alot more. I have never heard that before from the central bank governors trying to talk down the stock markets that is new. Also the stock markets are largely ignoring them .
However it is the bond markets that are really suffering through all this, normally this is the market investors run to in times of trouble but now they are running away from bonds. It could be that they are moving money from bonds to stocks since at least stocks offer some protection from inflation. This is what must have the central banks so worried.
Food for thought, perhaps, for anybody who thinks that they should avoid or reduce exposure to US equities...
www.visualcapitalist.com
Ranked: The World's Largest Equity Markets
The companies listed in the U.S. have a greater total market capitalization than in the next nine largest markets combined.
www.visualcapitalist.com
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European markets in total are worth around 20 trillion still far behind the US but even on the basis of europe catching up with all the military spending etc I still think the growth story out of a sleepy europe is far more convincing that the US continuing on that trajectory. After the dot com bust the US markets experienced a lost decade and the rest of the world caught up and out performed.
Maybe when the inflation and interest rate cycle eventually turns will be the time to pick up very cheap bonds like what happened in the early 80s. But central banks will likely have to intervene before that to save the bond markets.
So it looks like the stock markets were proven right by pricing in a resolution to the strait of hormuz early on and that it would be re opened in months. The sell off was short lived. Were the central banks ultimately wrong though, why were they trying to talk down the markets, they weren't doing that during the financial crash or even the covid crash?
TACO