Official saddo financial thread

[walrus]

Could have some logic on that one but it’s not a given

Bond yields are low which will send more people to equities

In summary, high P/E ratios in a vacuum are not a doomsday predictor, but they still matter. The unique characteristics of the current environment, however, likely should change the way we look at the valuation metric for now.

Certain macro factors at play, such as historically low interest rates, are one difference. The relative attractiveness of stocks given their higher dividend yield compared to bonds, as a result of very loose monetary policy, has pushed P/Es higher. Couple this with subdued inflationary pressures, and this could carry on for some time still.

From a historical perspective, the trailing P/E ratio is still just under one standard deviation from its mean going back over the past 40 years, to 1977. The metric has been higher than its current value approximately 20% of the time since 1977. Similarly, the forward P/E is also just below its one standard deviation point, with data since 1990. The forward metric has been higher than its current value approximately 17% of the time. So although the metrics are near their highest levels, they have been higher.

What the historical data does clearly show, however, is that higher current valuation levels do tend to correspond with low future financial returns. Analyzing the data since October 1977 shows that, on average, P/E ratios in the range of 20-25 generally correspond with a subsequent 12-month return of ~5.7%; echoing sentiment by Vanguard recently, which told investors to expect no better than 4 percent to 6 percent returns from stocks in the next five years.

I lost the rest of the article

[walrus]

@Gandalf u bring up inflation from time to time check this out

CARACAS (Reuters) - Venezuelan consumer prices rose 488,865 percent in the 12 months ending in September, a member of the opposition-run congress reported on Monday, as the OPEC nation’s hyperinflation continues to accelerate amid a broader economic collapse.

https://www.reuters.com/article/us-v...-idUSKCN1MI1Y6

[brocktonblockbust]

Not fair to troll Miles on Venezuela.

[Gandalf]

@Gandalf u bring up inflation from time to time check this out

CARACAS (Reuters) - Venezuelan consumer prices rose 488,865 percent in the 12 months ending in September, a member of the opposition-run congress reported on Monday, as the OPEC nation’s hyperinflation continues to accelerate amid a broader economic collapse.

https://www.reuters.com/article/us-v...-idUSKCN1MI1Y6

That is frankly terrifying. isn't it? People living in the here and now with debts are playing a dangerous game by not preparing for rainy days. At least if you held gold or crypto in Venezuela you would have protection. It would be your insurance against financiers and government.

Kirk thinks I am a bit bonkers with my talk of inflation here, but I see it on the ground. There are big problems. Personal debt here is among the highest in the world and rising at one of the fastest rates. China's personal debt is increasing fast, but by contrast it is relatively low. Basically the central bank won't increase interest rates because of these people that have been irresponsible. Then America is increasing rates and money will simply flow there. It will create a currency crisis and then when you factor in massive overbuilding a chronically low birth rate and you have serious issues. Oh, and 100 billion won was lost through poor investment with the national pension fund this year. I'm telling you if you do not act on your negative perceptions, then you will starve and potentially die.

[walrus]

@Gandalf u bring up inflation from time to time check this out

CARACAS (Reuters) - Venezuelan consumer prices rose 488,865 percent in the 12 months ending in September, a member of the opposition-run congress reported on Monday, as the OPEC nation’s hyperinflation continues to accelerate amid a broader economic collapse.

https://www.reuters.com/article/us-v...-idUSKCN1MI1Y6

That is frankly terrifying. isn't it? People living in the here and now with debts are playing a dangerous game by not preparing for rainy days. At least if you held gold or crypto in Venezuela you would have protection. It would be your insurance against financiers and government.

Kirk thinks I am a bit bonkers with my talk of inflation here, but I see it on the ground. There are big problems. Personal debt here is among the highest in the world and rising at one of the fastest rates. China's personal debt is increasing fast, but by contrast it is relatively low. Basically the central bank won't increase interest rates because of these people that have been irresponsible. Then America is increasing rates and money will simply flow there. It will create a currency crisis and then when you factor in massive overbuilding a chronically low birth rate and you have serious issues. Oh, and 100 billion won was lost through poor investment with the national pension fund this year. I'm telling you if you do not act on your negative perceptions, then you will starve and potentially die.

It’s a shame. People are trying to flee to Argentina but the government is in such collapse there is a shortage of passports. Eggs have actually become currency in Venezuela. Frightening to see

[Beanz]

20 pages😁 fascinating.

[brocktonblockbust]

Fuck, it'll be 22 by tonight. It goes from Bitcoin to Litecoin to The Cloud bullshit, then off to Venezuela, watches, smoking jackets and "spooning" with Lyle, before that jabs at Kirkland's charts & graphs, now it's fucking Argentina.

[walrus]

20 pages😁 fascinating.

Thank you, it is rather nice. Had u jumped on my crypto suggestions u could have retired if U played it right

[walrus]

(Bloomberg) -- Plunging global markets lopped $99 billion from the fortunes of the world’s 500 wealthiest people on Wednesday, the year’s second-steepest one-day drop for the Bloomberg Billionaires Index.

Amazon.com Inc. founder Jeff Bezos lost $9.1 billion, the most of anyone on the index, as shares of the online retailer fell the most in more than two years. The plunge lowered Bezos’s net worth to $145.2 billion, its lowest since July.

https://www.bloombergquint.com/marke...thy#gs.gJkU_nU

[Gandalf]

Not enough, I want a proper correction. 40-50% is reasonable. And to then respond by making interest rates 5%. Flushing the toilet every now and then is really not a bad thing. If you owe a debt on a house that is 20 years long and rely on low interest rates then you rely on cronyism. I want a real economy that works properly with no QE or artificial stimulation. It just blocks the toilet some more. Flush it! Brock knows about this kind of thing. @brocktonblockbust

[walrus]

Not enough, I want a proper correction. 40-50% is reasonable. And to then respond by making interest rates 5%. Flushing the toilet every now and then is really not a bad thing. If you owe a debt on a house that is 20 years long and rely on low interest rates then you rely on cronyism. I want a real economy that works properly with no QE or artificial stimulation. It just blocks the toilet some more. Flush it! Brock knows about this kind of thing. @brocktonblockbust

A drop of 40 to 50p is prob not likely anytime soon. I’d say 20% would be more likely. A forty to fifty percent drop would make a lot of us who short or invest on vix etfs very wealthy. It’s been a nine year bull. I was not shocked or nervous at all during that drop. When your up 300-500 percent over the years the short term drops don’t mean much. I’m really thinking we will be ok till 2020 or 2021. We are definitely due for a correction and with all the major trading done on algorithms the sell offs tend to become more extreme. It really doesn’t seem P/E are crazy at the moment. We have some like Netflix and Tesla which are insane but nowhere near the tech bubble. I say all this knowing I could be 100p wrong. Investing is never a 100p correct thing, there are a shitloads of too late, too early, should have got more and should have got less. Don’t hope for the worst miles, you know what the worst feels like, it’s not nice. The worst will always come, it doesn’t need our encouragement

[Gandalf]

I feel a bit puritanical in that sense. I kind of want all the bad actors and people who have borrowed badly to drown. The current environment does not help people who have done the right things. For instance low interest rates have meant old people who relied on savings get screwed while some yuppie is able to borrow cheaply to pay for a big house or get an SUV he hasn't got the cash for.

Maybe the Fed needs to be disolved. Let the market itself be the judge because QE, manipulated rates etc is a form of financial fascism. The banks fail, then let them fail. he Fed is their insurance, not ours.

[walrus]

I feel a bit puritanical in that sense. I kind of want all the bad actors and people who have borrowed badly to drown. The current environment does not help people who have done the right things. For instance low interest rates have meant old people who relied on savings get screwed while some yuppie is able to borrow cheaply to pay for a big house or get an SUV he hasn't got the cash for.

Maybe the Fed needs to be disolved. Let the market itself be the judge because QE, manipulated rates etc is a form of financial fascism. The banks fail, then let them fail. he Fed is their insurance, not ours.

I agree in part. I’m reading the sept economist and it talks about the rigged market. The fed was way to easy with the banks leading up to the crash. However, with the crash, the big boys, except Lehman brothers, did just fine. It was the normies with 401k and moderate investments who get screwed with 0 bailouts. People are just trying to live and get a little bit ahead for retirement. I don’t wish bad on any of them.

[brocktonblockbust]

I agree with Miles 100% on this in fact I will take it much beyond the economy and just bring it to the entire species of homo sapiens. I want to see the whole thing get flushed down because it is a joke and people take themselves way too seriously that's why I like to poo poo Everything cuz Everything really is poo poo and needs to be flushed just like @Gandalf has said

[walrus]

Well you have Bezos then you have the rest of the world

In a twice-yearly report the World Bank found the number of poor worldwide was still "unacceptably high"
Despite progress in reducing extreme poverty, nearly half the world's population lives on less than $5.50 a day, with a rising share of the poor in wealthier economies, the World Bank said Wednesday.

In a twice-yearly report, the bank took a broader look at poverty to see where countries were lagging, even though the share of those living in extreme poverty—defined as earning less than $1.90 a day—has continued to come down in recent years.

https://m.phys.org/news/2018-10-world-day-bank.html