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I think you misunderstood the above poster. Diving stock by US GDP at best needs to be defended with a real argument, not taken as the word of investment divini

I think you misunderstood the above poster. Diving stock by US GDP at best needs to be defended with a real argument, not taken as the word of investment divinity. Maybe there is an argument there, but "The number was big and then it was not big!" is a weak one. What is the GDP? It's goods/services/stocks/and government spending. So you are (sort of) trying to figure out the ratio of stocks to the other things. Maybe intuitively we feel that investment should not be too much higher than the actual payoffs (goods/services) we are producing right now. But what exactly, is too high? The number is bigger than before... so what?

ajross 7y ago
You're demanding... a first principles model of stock market prediction (something that obviously doesn't exist) before you'll buy an ad hoc napkin result showing that we're probably due for a correction in the relatively near term (something basically everyone agrees on)? Seriously? I mean, this logic spins around too: if you think the market won't dip, what's your reasoning? The fact that you aren't a billionaire tells me you probably don't know any better than anyone else. At least this metric has empirical data (there's a chart right there in the article!) to back it up, and it was "developed" by a seasoned practitioner who most of us would agree is better at this stuff than randos on HN. I mean... it passes the smell test if nothing else.