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This is sensationalism at its best and repeats what people have been preaching for years, one big example being Ray Dalio https://www.youtube.com/watch?v=PHe0bX
by xzel 9y ago
This is sensationalism at its best and repeats what people have been preaching for years, one big example being Ray Dalio https://www.youtube.com/watch?v=PHe0bXAIuk0 https://www.youtube.com/watch?v=PHe0bXAIuk0. The fact the US market is probably in the late cycle says nothing about how long that could last or about the state anywhere else in the world. Yes the Fed will be raising rates, yes money won't be as cheap but there are still companies making products and making a difference in the economy. There are still good investments to be made in emerging markets, which are less mature in their cycle, and even can be found in the US's more mature part of the cycle. I don't know how many fund managers invest strictly according the the cycle, I'd say 0, but instead use it as a piece of information to help make their decisions and help rationalize valuations, metrics, etc. Regardless, diversify your holdings from just US securities (again something that has been said forever) and if there is a market downturn, it will probably come back up eventually. It is, after all, a cycle.
- metalliqaz 9y agoIt's not purely an examination of a cycle. They are talking about indicators, especially decoupling of economic dependencies. For example, they cite that valuation is starting to diverge from corporate earnings, which could indicate a coming correction (and therefore downturn).
- xzel 9y agoBut that has been happening for years during this cycle, investors willing to pay a premium for future earnings, Tesla, Amazon, the list could go on. On the other side companies with good earnings are still underpriced because people are pricing in other things. I see that as a good thing, people are being rational and not sticking to numbers. If the banks thought they were undervalued they'd be taking huge positions in those securities, not exposing them to the world. The only really bit in this article was a shitty attempt at explaining the "economic cycle". Saying the "Downturn Is Coming" because we might be a peak was less helpful than explaining what the cycle is, what it means to be at this point and what that might mean to do about it. Saying the "Downturn Is Coming" to me says, "shit guys, sell all your securities right now". It is plain sensationalism. To reiterate, I don't see much substance in this article and I expect a lot more from someone claiming the "Downturn Is Coming". If anyone can get their hands on a copy of Gloom Boom Doom [1] by Marc Faber and you see what quality analysis looks like of the current economic cycle. I believe his August edition goes into it but I don't have my copies to confirm. [1] www.gloomboomdoom.com