Sunday, May 14, 2017

"What Bubble?"

This model is said to be one of investor Warren Buffett's go-to market valuation measures, sometimes called the "Buffett indicator"

Stock market capitalization to GDP:

"Even before the postelection rise, several measures of valuation showed that stocks were about as expensive as they were during the tech bubble. "

"Measured against interest rates, stocks actually are on the cheap side compared to historic valuations"

Spot the difference from Y2K, compliments of 0% interest rates:

"For hedge funds, value at risk is low when VIX is low, so they will be carrying bigger positions"

"The market is very narrow and brittle, which presents many opportunities"

Joe Kernen: "I hear you - keep averaging in..."