Friday, Feb 27, 2009
Shares aren't cheap - they have much further to fall
MoneyWeek: Shares aren't cheap - they have much further to fall
As stock markets tumble, most people assume shares are getting cheaper. But in fact they're getting more expensive...
Posted by damien @ 11:25 AM (495 views) Add Comment
4 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. bellwether said...
Fair enough if things remain as is, inflation is however a major variable that might alter the outlook.
2. plato said...
The author makes a fair point but isn't the Market all about the future and priced accordingly? Probably more to the point would be more devastating future occurrences added to the present banking crisis that effect panic and cause loss of conceived value.
3. quiet guy said...
Interesting. I saw a recent video interview of Jim Rogers in which he stated that he sees virtually no shares worth buying (globally).
http://www.youtube.com/watch?v=LBRHmZiAEcs (10:32)
@plato
Rogers specifically makes the point that 'the concensus' has been wrong time and again i.e. the market is not pricing shares correctly.
4. 51ck-6-51x said...
plato said "isn't the Market all about the future and priced accordingly"
well... this would be a no arbitrage argument.
Interestingly: If every market participant believes arbitrage opportunities arise, there will be none (the smallest deviation in price from fair value will immediately be corrected); conversely if every market participant believes arbitrage opportunities never arise then there will be arbitrage opportunities (think of the classic example of a £20 note laying on the street, everyone would walk past it thinking, "it cannot be real as someone would have picked it up already").
So my take is - there are arbitrage opportunities, but they are fairly rare and one needs to have low costs and/or plenty of capital (heh - or use leverage like the hedge funds) to be able to take advantage of them.