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Most companies latest quarterly earnings reports are great, unemployment is at record low. This is not a financial crisis based on reality, this is a crisis dri

Most companies latest quarterly earnings reports are great, unemployment is at record low. This is not a financial crisis based on reality, this is a crisis driven by fear of what could possibly happen, not what is actually happening and also the 2008 financial crisis is still in people’s mind, most of us would rather get out now than go through another 2008... I’m expecting this meltdown to be very short(less than a year), but we’ll get the real meltdown a few years later, resulting in a double-hump chart. Edit: why the downvote, I’m really starting to hate the HN platform

MuffinFlavored 8y ago
because you just tried to pass off your analysis of the situation coupled with a bunch of assumptions as solid stock market analysis stop trying to guess the market > would rather get out now That sounds like a really bad idea, even if it dropped 50%-60%.
- aplummer 8y ago
  My university economics rusty but it’s not bad analysis, the current market does not have the indicators of cyclical downturn (just read from any central bank of X, aka the pros) and a risk averse person given the uncertainty combo of brexit, Chinese stimulus, unprecedented interest rate lull, (locally to me and maybe you Australian housing market changes), and a US president that may fire the CB head any day or do [unprecedented act] really not the worst idea to take some low risk options.
whack 8y ago
To be honest, this market correction has been a long time coming. The index PE ratio had been in the 20-25 range. This translates to a paltry earnings yield of 4-5%. Far below its historical range. Investors had been ignoring this fact because bond yields are so low, and they figured increases in the PE ratio will make up for the paltry yields. But that's clearly not sustainable in the long run. At some point this bubble was bound to burst, which is exactly what happened. Today, the PE ratio is closer to 15, similar to its historical value. In overseas markets, the PE ratio is even lower than that. We may still see some further drops due to investors fears, but short of Trump kicking off a full blown global trade war, I doubt we'll see anything like a 2000/2008 meltdown.

MuffinFlavored 8y ago

because you just tried to pass off your analysis of the situation coupled with a bunch of assumptions as solid stock market analysis stop trying to guess the market > would rather get out now That sounds like a really bad idea, even if it dropped 50%-60%.

aplummer 8y ago
My university economics rusty but it’s not bad analysis, the current market does not have the indicators of cyclical downturn (just read from any central bank of X, aka the pros) and a risk averse person given the uncertainty combo of brexit, Chinese stimulus, unprecedented interest rate lull, (locally to me and maybe you Australian housing market changes), and a US president that may fire the CB head any day or do [unprecedented act] really not the worst idea to take some low risk options.

whack 8y ago

To be honest, this market correction has been a long time coming. The index PE ratio had been in the 20-25 range. This translates to a paltry earnings yield of 4-5%. Far below its historical range. Investors had been ignoring this fact because bond yields are so low, and they figured increases in the PE ratio will make up for the paltry yields. But that's clearly not sustainable in the long run. At some point this bubble was bound to burst, which is exactly what happened. Today, the PE ratio is closer to 15, similar to its historical value. In overseas markets, the PE ratio is even lower than that. We may still see some further drops due to investors fears, but short of Trump kicking off a full blown global trade war, I doubt we'll see anything like a 2000/2008 meltdown.