# Stock Market Bubble?



## jwoodie (Mar 6, 2013)

I am wondering about the sustainability of the new record for the DJIA.  This represents an average p/e ratio of 15.5, which translates to a cost of raising capital of 6.5%.  Since the current prime rate is only 3.25%, the market does not seem to be overvalued at this time.  However, if interest rates return to "normal" levels, the market may be negatively affected.  In this event, will investors abandon equities and return to debt instruments?  If not, where will all the money go?


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## Sallow (Mar 6, 2013)

jwoodie said:


> I am wondering about the sustainability of the new record for the DJIA.  This represents an average p/e ratio of 15.5, which translates to a cost of raising capital of 6.5%.  Since the current prime rate is only 3.25%, the market does not seem to be overvalued at this time.  However, if interest rates return to "normal" levels, the market may be negatively affected.  *In this event, will investors abandon equities and return to debt instruments? * If not, where will all the money go?



I personally don't think so.

Technology is going to look very attractive for a couple of reasons.

First there is ALOT of money sitting around doing nothing.

Second, there are new huge companies coming on line. Look out for Wells Fargo, they are buying every little company on the street.

Third, because of this, there is going to be increased traffic with companies that provide financial services to this new guys. And..no one has been upgrading anything, for almost a decade.

Look for massive spending on infrastructure at these companies.


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## boedicca (Mar 6, 2013)

^^^ Doesn't understand how the Fed is printing money and what will happen when that stops.


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## Mad Scientist (Mar 6, 2013)

As long as Federal Reserve print money, Stock Market is fly! 

Federal Reserve and Insider Banks buy all mortgaged Real Estate in US with $85 Billion in Taxpayer Dollars every month since last September, about $400 Billion so far.

When Federal Reserve stop print money, Dollar Crash. Fed own most American Property and Americans become Debt Slaves to Banks who will usher in Total Communist Banker Control!

It will be Paradise!


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## william the wie (Mar 6, 2013)

boedicca said:


> ^^^ Doesn't understand how the Fed is printing money and what will happen when that stops.


It's not just the Fed. Money is pouring in from the EU and Far East. Sallow is right too. Computer memory chips are still returning the same 41% a year, optical electronics about 2.5% per month to double value/$ every 18 months, additive manufacture and nano-tech are in the same ballpark. Robotics and automation will get a big boost from Obamacare. A 30K DJIA and an election disaster for the Ds in 2014 will likely result from that kicking in 1/1/14.


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## waltky (Mar 7, 2013)

jwoddie wrote: _ If not, where will all the money go?_

Where it always goes...

... in Wall Street's bankers an' trader's pockets.


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## realinvestment (Mar 7, 2013)

Never bet against the Federal Reserve.


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## NYcarbineer (Mar 7, 2013)

The rally is rather narrow.  The Dow is about the only index that made an all-time high.


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## william the wie (Mar 8, 2013)

realinvestment said:


> Never bet against the Federal Reserve.


It isn't the Fed fueling this move, try the ECB, BOJ and PBC. Italy and more quietly Spain are debating getting out of the Eurozone, Japan is fighting deflation and China has a $20 trillion + real estate and infrastructure bubble. The US as the best of the worst is getting the safe haven treatment in spades. The advance is not only narrow but low volume to boot.


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## SteadyMercury (Mar 9, 2013)

NYcarbineer said:


> The rally is rather narrow.  The Dow is about the only index that made an all-time high.


I don't think making an all-time high is the definition of a rally. Look at S&P500 or Wilshire5000, this is clearly a broad rally not limited to DJIA stocks.


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## Truthmatters (Mar 9, 2013)

Lets not forget how badly you on the rights predictions have proven out in the past.


Why would anyone believe in what you say wen your track record is SOOOO bad?


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## blackcherry (Mar 10, 2013)

2013 .
The year that the shit hit the fan  when the refuge of last resort finally literally disintegrated .
Dow down to 6-7000 in two years or under ?  I have effectively  bet my every thing i own on it .And I have not -- and will not  -- lose even one minute worrying that I could be wrong . 
it is more certain than the sun rising tomorrow .imo


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## JimmieD (Mar 30, 2013)

jwoodie said:


> I am wondering about the sustainability of the new record for the DJIA.  This represents an average p/e ratio of 15.5, which translates to a cost of raising capital of 6.5%.  Since the current prime rate is only 3.25%, the market does not seem to be overvalued at this time.  However, if interest rates return to "normal" levels, the market may be negatively affected.  In this event, will investors abandon equities and return to debt instruments?  If not, where will all the money go?



According to all the asset pricing models I know, a rise in the risk free interest rate will always have a negative impact on asset prices.  Intuitively it makes sense.  For example, if I can get a risk free return of 5%, why would I ever by a bond yielding anything less?  

And there is no way to tell for sure when the risk free rate will rise since this event is a policy decision made by central banks.


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## Mr Natural (Mar 30, 2013)

There's an old saying:

"When interest rates are low, stocks will grow.  When interest rates are high, stocks will die."


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## Rozman (Mar 30, 2013)

I wonder if Obama and his little Democrat henchman have a plan to artificially prop up the stock market.Then when it crashes and we all know it will and since we all have our IRA and 401 k plans 
tied to it we will be more then willing to hand over our accounts to the government.In return we
will be guaranteed a fixed monthly allowance down the road.


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## Truthmatters (Mar 30, 2013)

boedicca said:


> ^^^ Doesn't understand how the Fed is printing money and what will happen when that stops.



look above


this person has no idea about the finacial world except what Lush Limpballs tells her


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## Rozman (Mar 30, 2013)

heh heh heh 
El Rushbo rules!


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## william the wie (Mar 30, 2013)

Cyprus needs to shake out before we can figure out what all of this means. The slow roll EZ bank runs could run the Dow upto 30,000 on low volume and flight capital.


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## JWBooth (Mar 30, 2013)

Truthmatters said:


> boedicca said:
> 
> 
> > ^^^ Doesn't understand how the Fed is printing money and what will happen when that stops.
> ...



And yet her level of understanding vastly exceeds that displayed by your drunken, racist, ill informed tripe.


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## boedicca (Mar 30, 2013)

william the wie said:


> Cyprus needs to shake out before we can figure out what all of this means. The slow roll EZ bank runs could run the Dow upto 30,000 on low volume and flight capital.




Perhaps.  Certainly the banksters will pump up equity promotions in order to cash out while dumping overvalued stocks on retail investors (largely invested in 401Ks and IRAs).

But with the economy meandering at such a low growth level with persistent U6 unemployment, more and more people are cashing out their retirement accounts just to live on.   Considering how the Obama administration is eying nationalizing them, it's not such a bad move to spend the money now.

That said, equities are the place to be as long as the Fed is committed to QE^Infinity and ZIRP.  The Bernanke will keep it up through as much of Obama's term as he can, and at least through the 2014 elections.


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## boedicca (Mar 30, 2013)

JWBooth said:


> Truthmatters said:
> 
> 
> > boedicca said:
> ...




TMN persists in this fantasy world where she believes everyone who disagrees with her listens to Rush Limbaugh.

I don't - I rarely listen to talk radio, not that there's anything wrong with it.  I just don't have it as part of my lifestyle.


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## editec (Apr 27, 2013)

American Communist said:


> As long as Federal Reserve print money, Stock Market is fly!
> 
> Federal Reserve and Insider Banks buy all mortgaged Real Estate in US with $85 Billion in Taxpayer Dollars every month since last September, about $400 Billion so far.
> 
> ...





I think we're already there, mate.  

Not that it cannot get still worse, of course.


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## Truthmatters (Apr 27, 2013)

hey right wingers


you do remember you have been incorrect on all your doomsday predictions for ever right?


You also insisted everything was just peachy right up until Bush had to go on TV and tell everyone he fucked us all


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## Truthmatters (Apr 27, 2013)

blather along 


we all know you will.


Your track record sucks ass.


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## Skull Pilot (Apr 27, 2013)

The fed is keeping interest rates artificially low, the government is printing money with abandon.

People are being forced to put their money in the market to get any return.

This is bubble blowing at its finest.


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## Truthmatters (Apr 27, 2013)

dudes you have never been right why should anyone listen to what you have to say?


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## iamwhatiseem (Apr 27, 2013)

Is there a fund we could take up to bribe cereal to perm ban TDM??
It's like trying to have a conversation with people with a naked dancing clown in the room carrying an air horn.


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## Truthmatters (Apr 27, 2013)

ah the "your a poopy pants" debate.


cons love freedom of speech huh


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## Truthmatters (Apr 27, 2013)

Go get us a time in history where the right were proven correct in the real world on a policy issue


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## Harry Dresden (Apr 27, 2013)

iamwhatiseem said:


> Is there a fund we could take up to bribe cereal to perm ban TDM??
> It's like trying to have a conversation with people with a naked dancing clown in the room carrying an air horn.



and she actually thinks she is helping in the threads she is in...she has no clue how she fucks the thread up....


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## Avorysuds (Apr 27, 2013)

Truthmatters said:


> hey right wingers
> 
> 
> you do remember you have been incorrect on all your doomsday predictions for ever right?
> ...



I hate to break it to you but you are the biggest Republican I know. I mean, how many Bush era policies has Obama repealed? Now list the Bush era policies Obama expanded... Now look at who you voted for 2x...


/owned


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## Avorysuds (Apr 27, 2013)

boedicca said:


> JWBooth said:
> 
> 
> > Truthmatters said:
> ...




You have to understand... TM listens to Rush and watches more Glenn Beck than prolly any 3 "rightwinggers" on these boards combined.


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## editec (May 23, 2013)

I'm putting all my money in those APPLE subsidaries that live in TAX HAVEN LIMBO.

They're cash rich and apparently owe nobody nuttin!


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