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As a fundamental analysis investor, I find it so silly, it isn't even worth 1/10 of it. But those kind of movements happen every once in a while and I've learne
by thiago_fm 6y ago
As a fundamental analysis investor, I find it so silly, it isn't even worth 1/10 of it. But those kind of movements happen every once in a while and I've learned to live with it and just observe.
The reason that it's happening?
So, one part of it is government driven: 0% rates, FREE MONEY, money printing press goes BRRRRRRRRRRRRRR.
Now for Tesla, it's the kids. The same that popped up cryptos through the roof in 2016-7.
Nowadays they are at r/wallstreetbets using robin hood.
Institutional investors are enjoying the ride as well.
People aren't also questioning FAANG and MSFT huge market caps without the same growth in the bottom line. Sure,, those companies are doing well, but they valuation rose much higher than they are able to give returns to its investors.
It's the same problem. I have 0 positions on those stocks because they are like cocaine for the mind and this will all eventually crash. Gold and real things are your best bet.
If it doesn't crash now, it means that there'll be a huge debasing of the dollar to match those valuations. There's just too much money in the economy and very little being produced.
I believe what we may see is that the dolar vs other currency pairs will devaluate a lot, meanwhile inflation will remain low for a little while and then it will hit everybody very hard, because it means for every imported good Americans will need to pay much more.
FED has a huge issue that it can't hike up interest rates or start cleaning up his huge balance and when inflation comes for real(not the 2% they expect, but more like Argentina style inflation), they won't be able to lower that inflation without literally stopping the economy.
It's as if QEs are hiding dust under the carpet to make the house look clean. Initially, it indeed looks clean and there's no impact. Even after a while it is still fine. But now there's like a mount everest of dust and the carpet can't hold it any longer. Once shit hits the fan, all americans(and western people) will feel it.
Americans like to believe in the fallacy of the reserve currency. Currency is currency. Every single currency can end up having huge inflation and turning to dust if enough money is printed. US has been able to get around having this problem because so many countries are dependent on it, but there's a limit and the writing is on the wall that this limit has been already reached. And when countries stop relying on US Dollars as it suffers too much debasing and can't be reliably used for trade anymore, the country we know as USA will just implode, because it's only real product it exports is the Dollar, which will be worthless.
World Economy will shift to China and Asian countries which produce most of the shit western economics consume and we'll have a new world order. It's about time.
- taf2 6y agoPretty doom and gloom - when do you predict the end will come? 2021? 2022? Or maybe we have a few more years 2035?
- Serious_Cheese 6y agoSince the FED lowered interest rates to zero and started buying corporate bonds [0], I predicated dollar inflation would rise. How should someone like me (a blue collar working lower class) prepare for the storm? Should I invest in stocks? Buy property? Buy things like cars? How should I prepare for what's about to come? It might seem speculative, but OP's comment is based on how economics works, so the storm is about to hit. The big question is when? And how should we prepare? [0] https://www.cnbc.com/2020/06/29/the-fed-is-buying-some-of-the-biggest-companies-bonds-raising-questions-over-why.html https://www.cnbc.com/2020/06/29/the-fed-is-buying-some-of-th...