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Stock Market


Volatire

Well-known member
Joined
Feb 25, 2012
Messages
13,416
Anyone lucky or smart enough to be invested in stock markets has enjoyed serious gains over the past year.

The explanation often given is Quantitative Easing i.e. money that FED (and BOE) printed has inflated a stock market bubble. Doomsters are fond of this explanation of course.

Unlike consumers, large companies are not indebted. In fact they have been sitting on a huge pile of cash and have been buying back their own stock. This boosts earnings per share and hence stock prices.

Another factor is very low interest rates. If you can earn a dividend yield of ~5% by owning a FTSE 100 stock, why put money on deposit at 2% in a bank that is probably bust?

Finally, investors don't trust the political system and owning stock is seen as an inflation hedge.

 


Marcos the black

Well-known member
Joined
Feb 3, 2009
Messages
18,708
Better off going to the racetrack.....
 

pragmaticapproach

Well-known member
Joined
Jul 21, 2010
Messages
8,817
Anyone lucky or smart enough to be invested in stock markets has enjoyed serious gains over the past year.

The explanation often given is Quantitative Easing i.e. money that FED (and BOE) printed has inflated a stock market bubble. Doomsters are fond of this explanation of course.

Unlike consumers, large companies are not indebted. In fact they have been sitting on a huge pile of cash and have been buying back their own stock. This boosts earnings per share and hence stock prices.

Another factor is very low interest rates. If you can earn a dividend yield of ~5% by owning a FTSE 100 stock, why put money on deposit at 2% in a bank that is probably bust?

Finally, investors don't trust the political system and owning stock is seen as an inflation hedge.

I wouldnt want to be a long term investor. Theres some good opportunities for daytraders and other short term traders, and not forgetting index futures, but its obviously going to plummet and plummet hard when it does.
 

Analyzer

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Joined
Feb 14, 2011
Messages
46,189
Well, this is an interesting topic, in the context of everybody here having some interest in politics.

And especially to see how various holders of certain political viewpoints will analyze current market valuations.

The monetarists, are going to keep buying shares. And will advocate sectors like banking, consumer goods, media companies.

The Keynesians will advocate purchasing government bonds to fund more stimulus packages, and lift the economy. And they might advocate a stock like General Motors or CRH which is expected to respond to such stimulus programs. In other words, those who believe in the stimulus.

The Austrians will advocate assets that are contrary to the monetarists and the keynesians, like mining stocks, or hydrocarbon producers - or conservative sectors.

Contrarians will invest in areas that get negative media coverage, currently - so as to run from the herd.

Personally, I suspect that we are seeing another asset bubble. The ISEQ is up 25% in 12 months. Yet most people have the same income as they had twelve months ago. With the onset of property taxes, etc... most people have even less disposable income.

The banks do not have more money to lend to the economy. The economy is not expanding. If anything it is contracting.
 
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Sync

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Joined
Aug 27, 2009
Messages
28,776
There's no real luck involved, no more than there is with gambling over time. Like every gamble, you don't invest more than you can afford to lose and when you start seeing the stock drop, get out.

Focus on the good companies who have been damaged purely because they've been in a poor stock market. Ignore poor companies who are boosted simply because they're in a strong market (or at least recognise what they are and view them as short term bets)

People who spread money around over the last few years in strong Irish companies (Paddy Power, Smurfit, Kerry) and the UK non nationalised banks should have pretty much doubled their money at least by now.

The simplest bet for longterm investment is to look around your home and your office. Look at the products. If you see someone who's making a large amount of those products, but their share. Diversification is key.
 

Ribeye

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Joined
Jul 12, 2011
Messages
26,304
 

highgiant

Member
Joined
Nov 11, 2012
Messages
15
Been listening to the doomsayers for a number of years now. But the market keeps rising.
people said the same when warned about house prices being about to drop :p

If its said long enough eventually it will come true :).
 
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Ribeye

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Joined
Jul 12, 2011
Messages
26,304
people said the same when warned about house prices being about to drop :p

If its said long enough eventually it will come true :).
 

NAPBAR

Well-known member
Joined
May 23, 2013
Messages
2,497
The greatest Ponzi scheme in history.

The whole system is based on people being able to borrow multiples of their earnings from Banks.

Those Banks are insolvent. The people they lent to are insolvent. The global financial system is insolvent.

When this reality is faced up to, the worlds economy will recover.
 

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