5 ms·

Chart reading is stupid. You could cut that chart off before any of the tech bubble starts and you would be able to say the same thing over and over about the m

by hueving 12y ago

Chart reading is stupid. You could cut that chart off before any of the tech bubble starts and you would be able to say the same thing over and over about the market being in an 'exceptional period'. 1990 - reaching all-time highs, 'exceptional period' 1991 - reaching all-time highs, 'exceptional period' 1992 - reaching all-time highs, 'exceptional period' 1993 - reaching all-time highs, 'exceptional period' 1994 - reaching all-time highs, 'exceptional period' 1995 - reaching all-time highs, 'exceptional period' >I think there's just too much money sloshing around right now. Why? Are you the tastemaker in how much money supply there should be? We have inflation numbers to help dictate that. If inflation isn't above its target, then there isn't too much supply.

mayukh 12y ago
I don't know why you're getting downvoted (I upvoted you). You make a good point. Valuations are both subjective (your view) and relative (where else can I put my money). This 'boom' could end tomorrow or go on for years to an end. Being early on a market call is the same as being wrong..which is why speaking about frothy valuations is one thing, putting money to work based on those presumptions of frothiness is playing with fire.
aNoob7000 12y ago
If the U.S. stock market is really fairly valued then moving rates up wouldn't be such an issue. Yet, the Federal Reserve can't talk about moving rates up a quarter point six months in the future without the market taking a dive. Why the anxiety??
- wahsd 12y ago
  Because everyone's freebasing and edging profits thinking they can get out quickly enough right before they loose consciousness.
bduerst 12y ago
Exactly. Trying to predict a "bubble burst" using line charts alone is analogous to scrying with tea leaves. With the housing bubble, it was very clear that the traditionally correlated mortgage and rental prices had separated, signalling that mortgages were in a bubble. Pointing a chart and saying it's high doesn't prove anything. You need to show signals other than the federal reserve moderating inflation (which is normal).
kyledrake 12y ago
Tastemaking? Okay, I can try that. I was visiting a friend last night, who is looking to buy her first house. She told me that she's been having trouble because people are showing up for $300k houses ($150-200k 5 years ago) and offering, same day, without an inspection, $600k cash offers. That tastes funny.
- bduerst 12y ago
  Was this in the SF Bay? Because that market is in a bubble from foreign investors looking to unload cash.
  - anigbrowl 12y ago
    I was just gonna say the same thing, SF and NY real estate markets (and a few others) have become asset dumps for the very wealthy and this has hugely distorted prices. We bought a house in the East Bay when the market was more or less at bottom and now I get a postcard almost every week from some local realtor asking if we're interested in cashing out.
    - bkjelden 12y ago
      I rent a SFH on the peninsula, and I get those same postcards almost weekly. I think what's most amazing to me is how much realtors are making right now. I'm not sure if it's still standard for the buyer's agent & seller's agent to each take a 3% cut like elsewhere in the country, but I've gotten multiple postcards where a realtor has moved $10MM-$15MM of inventory, in the last quarter, in my neighborhood alone. A 3% cut of that ain't a bad gig...
      - nradov 12y ago
        Only a very few star real estate agents make anywhere near that much. Most close few if any transactions per year. Out of the typical 3% commission per side of the transaction, the agent will only net about half. The rest goes to the broker and expenses.
  - 12y ago

by hueving 12y ago

mayukh 12y ago

I don't know why you're getting downvoted (I upvoted you). You make a good point. Valuations are both subjective (your view) and relative (where else can I put my money). This 'boom' could end tomorrow or go on for years to an end. Being early on a market call is the same as being wrong..which is why speaking about frothy valuations is one thing, putting money to work based on those presumptions of frothiness is playing with fire.

aNoob7000 12y ago

If the U.S. stock market is really fairly valued then moving rates up wouldn't be such an issue. Yet, the Federal Reserve can't talk about moving rates up a quarter point six months in the future without the market taking a dive. Why the anxiety??

wahsd 12y ago
Because everyone's freebasing and edging profits thinking they can get out quickly enough right before they loose consciousness.

bduerst 12y ago

Exactly. Trying to predict a "bubble burst" using line charts alone is analogous to scrying with tea leaves. With the housing bubble, it was very clear that the traditionally correlated mortgage and rental prices had separated, signalling that mortgages were in a bubble. Pointing a chart and saying it's high doesn't prove anything. You need to show signals other than the federal reserve moderating inflation (which is normal).

kyledrake 12y ago

Tastemaking? Okay, I can try that. I was visiting a friend last night, who is looking to buy her first house. She told me that she's been having trouble because people are showing up for $300k houses ($150-200k 5 years ago) and offering, same day, without an inspection, $600k cash offers. That tastes funny.

bduerst 12y ago
Was this in the SF Bay? Because that market is in a bubble from foreign investors looking to unload cash.
- anigbrowl 12y ago
  I was just gonna say the same thing, SF and NY real estate markets (and a few others) have become asset dumps for the very wealthy and this has hugely distorted prices. We bought a house in the East Bay when the market was more or less at bottom and now I get a postcard almost every week from some local realtor asking if we're interested in cashing out.
  - bkjelden 12y ago
    I rent a SFH on the peninsula, and I get those same postcards almost weekly. I think what's most amazing to me is how much realtors are making right now. I'm not sure if it's still standard for the buyer's agent & seller's agent to each take a 3% cut like elsewhere in the country, but I've gotten multiple postcards where a realtor has moved $10MM-$15MM of inventory, in the last quarter, in my neighborhood alone. A 3% cut of that ain't a bad gig...
    - nradov 12y ago
      Only a very few star real estate agents make anywhere near that much. Most close few if any transactions per year. Out of the typical 3% commission per side of the transaction, the agent will only net about half. The rest goes to the broker and expenses.
- 12y ago