A great piece from John Cassidy:
“My skepticism
about stocks is primarily based on nonpolitical factors: valuation, monetary
policy, and herding behavior—all of which can play key roles in driving the
market.
I’m not arguing
that we are in a full-on speculative bubble of the sort we saw in stocks during
the late nineteen-nineties and in the housing and mortgage markets during the
early two-thousands. Although the stratospheric valuation placed on Snap last
week should be seen as a warning sign—in the past few days, the company’s stock
has fallen back—it can’t be compared to the rash of dot-com I.P.O.s in 1999, or
the proliferation of “liar loans” in the mortgage market between 2004 and 2007.
Still, the price-to-earnings ratio of the S. & P. 500 index, which is
perhaps the most widely followed valuation metric, now stands at more than
twenty-six.”
Related:
A must read for stock market investors:
“Something happened in the stock market this week that
has only occurred twice since 1871: Robert Shiller’s favorite valuation method
for the S&P 500, the cyclically adjusted price-to-earnings ratio, reached
30.”
Political Risk and Equity Prices
IPOs and Silicon Valley
Winner-Take-All Capitalism
https://www.msn.com/en-us/money/markets/disturbing-new-facts-about-american-capitalism/ar-AAnKQGW