Are the forces that sold Trump/Brexit now lining punters up to buy overpriced stocks?

[Mikhail Liebenstein]

Interesting reading in the financial papers /websites at present.

There seems to be a lot of bluster about a melt up in stocks with talk of the DOW could rise 20% etc.

To me this smells like a concerted campaign to get the small guy to buy into the market just as it is about to tank.

The reality is net real trading volumes are down and valuations are stretched (in the US especially).

I also note that Mr Buffett is in the sidelines right now. The current wave of Motley Fool articles reminds me of DotCom, 2008 and the Bitcoin $1m merchants. 
 

In my mind this could only happen if the Dollar collapses. May be that is why central banks are buying Gold.

[GeneCernan]

Watching replies with interest as I'm just trying to decide whether now is time for 2 x £20k S&S ISAs to be opened. My instincts (which are worthless) tell me no, and to wait for Brexit to play out during 2020.

[jiltedjen]

The market could lose a lot of value but go up in dollar terms. 

there won’t be any brakes or ‘off’ switches on the printing machines. there is no appetite for falls, and the economy is not the best condition to survive the end of the free money party.

for a crash we need a massive blow off top. 

[VancouverGuy]

What makes you think it's overpriced? Most global markets have P/E ratios still in the mid teens or lower, UK included.

[VancouverGuy]

What makes you think it's overpriced? Most global markets have P/E ratios still in the mid teens or lower, UK included.

[micawber]

A lot of the froth is driven by the US FAANG stocks. Steer clear. But as VG says, other markets are trading on sensible PE's. I've mentioned to you before that there are many good quality UK stocks available. I just topped up my Oil stocks with BP and Shell - both yielding 6% dividends. Sure they may drop a bit in price but I'm happy to buy at these rates and hold for the long term.

Don't forget to diversify and rebalance and you'll be fine. Look up Permanent Portfolio and Golden Butterfly Portfolio. That'll ensure that you mitigate risks with a precious metal holding.

[dugsbody]

I think the market will go up or down, or possibly stay the same. I've positioned myself accordingly and will be back later to tell you what that position was to show how I'm a genius. 

[MonsieurCopperCrutch]

What’s a Bitcoin 1 million merchant? 

[Mikhail Liebenstein]

6 hours ago, VancouverGuy said:

What makes you think it's overpriced? Most global markets have P/E ratios still in the mid teens or lower, UK included.

The UK is probably a better bet in that if there is any chance of Sterling rising medium term you are on to loser holding other currencies or investments denominated in them. 

Personally I suspect the USD may slide, so the Dow might go up a bit in response to that, but it isn't a real gain. 

I also think if the US sees a sell off the FTSE will just follow. 

[Mikhail Liebenstein]

Here is a 2006 article: https://money.cnn.com/2006/06/29/markets/markets_newyork/index.htm

 

[ebull]

7 hours ago, VancouverGuy said:

What makes you think it's overpriced? Most global markets have P/E ratios still in the mid teens or lower, UK included.

Well if most [maybe 70%] of the E is based on credit and that is reaching it's limit which may cause half of more of that to be lost P/E won't look so good.

A little like the houseing market then.

Same question too  .... but when?

[Mikhail Liebenstein]

30 minutes ago, ebull said:

Well if most [maybe 70%] of the E is based on credit and that is reaching it's limit which may cause half of more of that to be lost P/E won't look so good.

A little like the houseing market then.

Same question too  .... but when?

I feels 2006/7 to me. But people are more alert this time. 

[Odakyu-sen]

I imagine that the "little guy" is inconsequential. It will be companies and pension funds who will be the big players and unlikely to be hoodwinked by "talk." 

[hotblack42]

Keyword here is punters, which I take to mean gamblers.  Gamblers will gravitate to hype and many will be burned.  I've tried to 'invest' over many years, albeit in modest amounts, and realised its, at best, a lot of effort for disappointing returns. At worst its a time consuming, and unpleasant way to lose money.

A meetings and conversations with the Investment Manager who looks after the bulk of my pension fund have shown me that investing well, is a difficult, full time job.  I do get a 60% staff discount on her fees, but that only kicked in in year 2 and I have no regrets about the thousands handed over on year 1.

Her only interest in pundits talking up the market will be to gauge their effect on amateur investors and general sentiment.

[Mikhail Liebenstein]

1 hour ago, hotblack42 said:

Keyword here is punters, which I take to mean gamblers.  Gamblers will gravitate to hype and many will be burned.  I've tried to 'invest' over many years, albeit in modest amounts, and realised its, at best, a lot of effort for disappointing returns. At worst its a time consuming, and unpleasant way to lose money.

A meetings and conversations with the Investment Manager who looks after the bulk of my pension fund have shown me that investing well, is a difficult, full time job.  I do get a 60% staff discount on her fees, but that only kicked in in year 2 and I have no regrets about the thousands handed over on year 1.

Her only interest in pundits talking up the market will be to gauge their effect on amateur investors and general sentiment.

I think the headlines are a mix of something to write about for the journos, and something to pump on the part of the financial community. To me it does feel late in the market, but  may be we haven't quite had the "it;s different this time" phase.

[Mikhail Liebenstein]

Whoops, wrong thread. 

Though give a view of the perils of proper investing. 

 

For total wonks:

https://www.gov.uk/government/statistical-data-sets/live-tables-on-local-government-finance

Edited December 22, 2019 by Mikhail Liebenstein

[The Spaniard]

2 hours ago, hotblack42 said:

Keyword here is punters, which I take to mean gamblers.  Gamblers will gravitate to hype and many will be burned.  I've tried to 'invest' over many years, albeit in modest amounts, and realised its, at best, a lot of effort for disappointing returns. At worst its a time consuming, and unpleasant way to lose money.

Yes, there is most certainly a huge difference between gambling (I prefer the term 'speculating') and long term investing.

However, I disagree that sensible investing is necessarily difficult or time consuming. My strategy is to accumulate over many years well established, well managed global equity investment trusts (IT) such as FCIT, SMT, WTAN, ATST, BNKR, SCIN, AGT, BUT, CLDN and similar. I do so within tax efficient SIPP, ISA and LISA wrappers.

I recognize fully that I am but an amateur and I rely on the professional IT managers to pick and choose on my behalf the equities within each IT. As far as I can tell, on the whole they do an excellent job.

If I feel disinclined even to choose between ITs I also sometimes just buy very low cost index trackers!

Usual disclaimer: This is anecdotal, NOT financial advice.

[dances with sheeple]

On 21/12/2019 at 14:01, GeneCernan said:

Watching replies with interest as I'm just trying to decide whether now is time for 2 x £20k S&S ISAs to be opened. My instincts (which are worthless) tell me no, and to wait for Brexit to play out during 2020.

I am drawn to cash, premium bonds,  and S&S ISA containing Global equities fund, some sort of bond exposure UK maybe or maybe also global bonds, emerging markets equity fund as a punt and credit/corporate bond fund exposure plus some lottery tickets.

https://seekingalpha.com/article/289382-clearing-up-corporate-vs-credit-bonds

and should add that everything in  the ISA is a tracker except maybe an active credit/corporate bond fund, have not really weighed that one up properly yet.

Edited December 22, 2019 by dances with sheeple