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Many people, myself included, think the stock market is in an enormous bubble, and ROI is poor considerng the market fundamentals in a recession.

A lot of the money being poured into shares is from QE, and there are hints that might dry up.

What is different these past few years is the growth of HFT in the UK & US.

So when the bubble bursts, it may happen lightning-quick before the circuit breakers kick in. Seconds, rather than hours.

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Sainsburys at 382p is the same levels or lower than 2000, and we are all avoiding the High street these days. PE of 12, market capitalisation of 7.2bn doesn't look too bad?

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I would venture that half the markets money suggest the market will rise and half the markets money ( or absence thereof) suggests it will fall.

Out of this dynamic we can derive a factor which we shall term the market price . Anyone who is 100% certain that it is incorrect will either make or lose money should they back their talk with a decision .

So many people forget the simplicities of life

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Many people, myself included, think the stock market is in an enormous bubble, and ROI is poor considerng the market fundamentals in a recession.

A lot of the money being poured into shares is from QE, and there are hints that might dry up.

What is different these past few years is the growth of HFT in the UK & US.

So when the bubble bursts, it may happen lightning-quick before the circuit breakers kick in. Seconds, rather than hours.

Sure, it is high and given the pain felt by ordinary people it seems only to be reflective of another world, but that's exactly what it is, another world.

The owners of equities are generally among the richest 10-20% of any society and reflects their hopes / view of the future, but who's to say that section of society has the best vantage point from which to gauge the future ? The bottom 60% has stagnant or declining wages so it's not hard to understand their view that we're going to hell in a handbasket given the rampant inflation in anything that one doesn't need credit to buy.

In my opinion the market will struggle to march upwards from previous highs and will probably hover 2-10% from them until real lasting signs of 'growth' based on expanding company profits instead of expanding govt. spending. If it goes crazily high from here, then you'll know it is in a bubble.

Please do not take this as financial advice though, it is just my 2p worth.

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Well, these HFT algos are executed with what is probably safe to say the the most cutting edge technology today.

They are not running as atypical computers, more like state machines to allow for more throughput.

Some of the best minds that should have been sending people to mars or creating a better energy supply are setting up algorithmic juggernauts for the banks.

Shame.

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I'm not sure how true this is but I heard that the bulk of earnings generated by the Ftse constituents is made abroad . Hence further devaluation of the Gbp would in effect translate to higher corporate profits for uk based firms as well as increased nominal share prices .

In which case it's logical to suppose Carrneys ( supposed if you believe some opinions) intention to add steroids to merv's plans will really see the Ftse take off . It's a theory anyway

Edited by Sir Harold m

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In which case it's logical to suppose Carrneys ( supposed if you believe some opinions) intention to add steroids to merv's plans will really see the Ftse take off . It's a theory anyway

Perhaps tell us what the 'steroid' policy is?

Japan-esque QE?

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Well, these HFT algos are executed with what is probably safe to say the the most cutting edge technology today.

They are not running as atypical computers, more like state machines to allow for more throughput.

Some of the best minds that should have been sending people to mars or creating a better energy supply are setting up algorithmic juggernauts for the banks.

Shame.

When are these algorithms going to replace bankers entirely? I don't have a problem with PCs getting huge bonuses.

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Of course all these graphs fail to account for the effect of dividends and dividend reinvestment, with which they'd look a fair bit more positive.

Equities are still yielding a good income, and in a low interest rate environment where cash-savings and bonds offer negative real returns, I know where my money's going.

Adjusted for Inflation, it doesn't look too bad:

http://www.aboutinflation.com/inflation-adjusted-charts/world-indices-inflation-adjusted-charts/ftse-100-index-inflation-adjusted

Surely the real bubble right now is in government bonds?

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Of course all these graphs fail to account for the effect of dividends and dividend reinvestment, with which they'd look a fair bit more positive.

Equities are still yielding a good income, and in a low interest rate environment where cash-savings and bonds offer negative real returns, I know where my money's going.

But what would it look like if all those equities in the FTSE100 at 1/1/2000 were still in the index?

Every three months the worst performers are chucked out and others take their place.

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Well, these HFT algos are executed with what is probably safe to say the the most cutting edge technology today.

They are not running as atypical computers, more like state machines to allow for more throughput.

Some of the best minds that should have been sending people to mars or creating a better energy supply are setting up algorithmic juggernauts for the banks.

Shame.

Excel is not cutting edge technology...

I met a DB admin from a bank - we wouldn't let him near a database and we're web devs - guy was utterly clueless.

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So when the bubble bursts, it may happen lightning-quick before the circuit breakers kick in. Seconds, rather than hours.

There is no latency in the circuit breakers.

Electronic markets mean the exchanges can simply reject orders when prices have hit limit down.

You cant beat the curbs unless there is bug in the exchange matching engine code (very unlikely).

But what can happen is a 10% fall then circuit breakers come in, trading resumes after a short halt and falls another 10%... etc.

So the stock market can still fall 30% in one day.

Gold on the other hand i think has no circuit breakers, can fall 30% in one day without any halts in between.

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Excel is not cutting edge technology...

I met a DB admin from a bank - we wouldn't let him near a database and we're web devs - guy was utterly clueless.

I think we are talking about different things here, or you've crossed threads. Storage of data is kind of irrelevant to the point I made about algorithmic trading.

My point was that the machines wired into the 'trading floor' are operating as state machines, in a more basic construct than standard computing, hence saving massive amounts of time and allowing much more trades.

Creating such finite state computing is very complicated business.

Finite-state machine - wiki

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Sainsburys at 382p is the same levels or lower than 2000, and we are all avoiding the High street these days. PE of 12, market capitalisation of 7.2bn doesn't look too bad?

The problem is that FTSE stock prices are determined by "the market" as a whole much more than fundamentals of any specific company, which in turn is mostly determined traders at big institutions and funds.

In a mess self-off your supposedly sound fundaments wont count for shit. The whole system is rigged so thats its all but impossible to meaningfully invest in a specific company.

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Adjusted for Inflation, it doesn't look too bad:

http://www.aboutinflation.com/inflation-adjusted-charts/world-indices-inflation-adjusted-charts/ftse-100-index-inflation-adjusted

Surely the real bubble right now is in government bonds?

Ah good, that link let me copy the image.

Agree that bond yields look ridiculous, 5 year gilt (Treas 5.0% 07-Mar-2018) 0.68% when inflation is 3.3%. No upside that I can see and a possible major downside as the price is 120.85 so there can be no hanging on until redemption to get back the money you've lost.

FTSE_100_Index_Inflation_Adjusted_Chart_July_2012.png

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Well, these HFT algos are executed with what is probably safe to say the the most cutting edge technology today.

They are not running as atypical computers, more like state machines to allow for more throughput.

Some of the best minds that should have been sending people to mars or creating a better energy supply are setting up algorithmic juggernauts for the banks.

Shame.

This. This and this.

The window of opportunity for the continued advancement of the human race is rapidly slamming shut. We've pissed away (pissing away, if you're more optimistic) a once, never to repeated gift of high energy density hydro-carbons.

The scientists that could have leveraged this gift towards a clean energy on-world/exploratory off-world future for mankind have been seriously misallocated. Those of us who refused to join the high-frequency coin clipping pointlessness remain underpaid, overworked and seriously thinking feckit and joining them in their gilded handbasket to a dead biosphere hell.

It is a shame. It's a dreadful, awful crying out shame :(

(Yes, I am a larf at parties too!)

Edited by sossij

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  • 242 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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