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At least we can dispense with the idea that the stock market is driven by short-term thinking. Prices are high because investors expect things to be better in
by twblalock 6y ago
At least we can dispense with the idea that the stock market is driven by short-term thinking.
Prices are high because investors expect things to be better in the future, even though things are bad right now. Maybe the investors are wrong, but at least they are thinking about the long term, or at least the intermediate term.
- deelowe 6y agoI think prices are high b/c retail investors are being taken for a ride and have no other recourse. A ton of cash has been injected into the system. People are rightly concerned about inflation. What do they do? Bonds aren't a good investment. Real estate will be affected by unemployment, so that's not an option. No one gives a crap about gold any more. Plus retirement funds carry insane penalties. It's not like pulling that stuff out is an easy decision.
- taurath 6y agoOne thing - real estate going down while inflation rises gives you a pretty clear hedge. If real estate goes down a lot faster than inflation rises, its best to hold cash. If inflation rises a lot faster than real estate goes down, its a lot better to buy real estate.