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> Are we in a bubble? No, at least not yet. I agree with everything you said except for this. Not because I am definitively saying we are in a bubble, but jus

> Are we in a bubble? No, at least not yet. I agree with everything you said except for this. Not because I am definitively saying we are in a bubble, but just pointing out it's impossible to know if we are. Very few people saw the last financial collapse coming.

lotsofpulp 7y ago
The last financial collapse had many companies claiming paper valuations of assets. Companies like AAPL/MS/GOOG/FB have significant net income with significant moats around their products that still have plenty of room to grow as they all move to subscription income.
- OnlineGladiator 7y ago
  It's always easy to come up with justifications for why "this time it's different" and people will be doing that even after the stock prices are already declining. It's impossible to foresee an unknown unknown.
ksec 7y ago
https://imgur.com/a/7ntUkKC https://imgur.com/a/7ntUkKC That is a simple chart of recent 30 Yrs S&P 500 P/E. > Very few people saw the last financial collapse coming While media points the last financial collapse blame to CDOs, the fundamentals of it was housing prices. May be it is new to many Americans, but for those who have lived and seen through Japan, South Korea, Hong Kong housing prices collapses in the 90s, it was rather obvious. I remember the moment when I mention it in 2005 and 2006, but no one believe market would collapse, the idea of housing prices would fall was literally unheard of. https://imgur.com/a/0jPNE26 https://imgur.com/a/0jPNE26 Now there are concerns of Cooperate Debt reaches new height, which is often the argument of bubble. The trouble is you cant look at cooperate debt alone and judge it. Amazon is 25B in debt, but they have 45B in cash. Apple are 100B in debt, but also ~250B cash. Amazon were issuing at 10 years and yields about 3.2%, for reference US 30 Yr treasuries has been floating at around 2.4 The vast majority of companies are swimming in cash. ( There is less of it now because of buy backs, which is what pushes those stock prices up ) So while the market, and general economy may not be healthy, I argued it isn't in a bubble either.
- OnlineGladiator 7y ago
  > So while the market, and general economy may not be healthy, I argued it isn't in a bubble either. You're completely missing the point. You can make arguments either way. Hindsight is 20/20. You're making an educated guess based on data which is informative, but it's theoretically impossible to predict a Black Swan event. And even without a Black Swan event, your analysis could be wrong. It's not like all analysts agree on much (if anything) - so how do you decide who's right when nobody has a perfect track record? You're making the best guess you can and I respect your analysis, but I don't assume it's correct. My point is simple: nobody knows for sure.
  - ksec 7y ago
    I sort of agree with what you said. >My point is simple: nobody knows for sure. Absolutely. I am suggesting to those who consistently points to doom's day needs better explanation rather than just debt alone. Edit: Actually it was my understanding that all bubbles, by definition must have some form or irregularities or speculation. After all that is what bubbles means, turns out when I was going to quote wiki for this reply, I discover there are whole set of economic papers suggesting bubbles completely unrelated to its intrinsic value and economic fundamentals. Will Read those paper when I have time.

lotsofpulp 7y ago

The last financial collapse had many companies claiming paper valuations of assets. Companies like AAPL/MS/GOOG/FB have significant net income with significant moats around their products that still have plenty of room to grow as they all move to subscription income.

OnlineGladiator 7y ago
It's always easy to come up with justifications for why "this time it's different" and people will be doing that even after the stock prices are already declining. It's impossible to foresee an unknown unknown.

ksec 7y ago

https://imgur.com/a/7ntUkKC https://imgur.com/a/7ntUkKC That is a simple chart of recent 30 Yrs S&P 500 P/E. > Very few people saw the last financial collapse coming While media points the last financial collapse blame to CDOs, the fundamentals of it was housing prices. May be it is new to many Americans, but for those who have lived and seen through Japan, South Korea, Hong Kong housing prices collapses in the 90s, it was rather obvious. I remember the moment when I mention it in 2005 and 2006, but no one believe market would collapse, the idea of housing prices would fall was literally unheard of. https://imgur.com/a/0jPNE26 https://imgur.com/a/0jPNE26 Now there are concerns of Cooperate Debt reaches new height, which is often the argument of bubble. The trouble is you cant look at cooperate debt alone and judge it. Amazon is 25B in debt, but they have 45B in cash. Apple are 100B in debt, but also ~250B cash. Amazon were issuing at 10 years and yields about 3.2%, for reference US 30 Yr treasuries has been floating at around 2.4 The vast majority of companies are swimming in cash. ( There is less of it now because of buy backs, which is what pushes those stock prices up ) So while the market, and general economy may not be healthy, I argued it isn't in a bubble either.

OnlineGladiator 7y ago
> So while the market, and general economy may not be healthy, I argued it isn't in a bubble either. You're completely missing the point. You can make arguments either way. Hindsight is 20/20. You're making an educated guess based on data which is informative, but it's theoretically impossible to predict a Black Swan event. And even without a Black Swan event, your analysis could be wrong. It's not like all analysts agree on much (if anything) - so how do you decide who's right when nobody has a perfect track record? You're making the best guess you can and I respect your analysis, but I don't assume it's correct. My point is simple: nobody knows for sure.
- ksec 7y ago
  I sort of agree with what you said. >My point is simple: nobody knows for sure. Absolutely. I am suggesting to those who consistently points to doom's day needs better explanation rather than just debt alone. Edit: Actually it was my understanding that all bubbles, by definition must have some form or irregularities or speculation. After all that is what bubbles means, turns out when I was going to quote wiki for this reply, I discover there are whole set of economic papers suggesting bubbles completely unrelated to its intrinsic value and economic fundamentals. Will Read those paper when I have time.