Ridiculous valuations....yet stay the course...
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Anonymous
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I was bored yesterday and I was looking at the valuations of some of the leading companies today and I just wonder if financial analysts are now using new novel financial techniques to come up with these valuations.
Yes we need to stay the course and keep pumping money into equities because we are told that's the only way to do it because it always turned out well in the long term blah blah....I get it so we need to stay the course. The company I work for has a ridiculous valuation and to managing it start returning 8%..lol..I am not naming the company, but it's impossible. I'll still remaining in equities, but honestly I am now wondering whether we are being "bullied" into putting in money in something we understand less and less. I mean on this very forum some people become extremely hostile at any suggestion that this time it's "different". If you think it's not, how do you reconcile these valuations with last valuations. What justify these numbers in your opinion. I have ZERO skills in financial analysis. But thankfully I can read numbers presented to me and frankly I am starting to worry. |
Anonymous
| I mean, I know a lot less than you— I’m no expert— but I feel the same way. I’ve taken some investments down to money market or bond funds.. own some gold, both funds and physical. We also own two homes, one of which is a lucrative rental with a low interest rate. So, in my mind, we’re somewhat diversified. There are a lot of sobering columns warning about the coming crash. |
Anonymous
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People who are 100% in equities don't want to be the only ones.
The belief (and it's not immaculate) is that the government will always bail us out to an extent if there is a financial crisis. What worries me most is that we actually have one the best environment for corporations. They got everything the |
Anonymous
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People who are 100% in equities don't want to be the only ones.
The belief (and it's not immaculate) is that the government will always bail us out to an extent if there is a financial crisis. What worries me most is that we actually have one the best environment for corporations. They got everything they need from the government. Should there be a crisis, I am genuinely curious what else the government can do? |
Anonymous
| How many equity owners do you think know about the valuations of the companies they are invested in lmao? They just care about the stock price. And unless they have basic knowledge of economics, they don't even know the difference between real and nominal prices. They just look at those nominal values, look at the returns (not in real terms) etc. |
Anonymous
| The market is not rational. If you're the only one acting rational you get left out of the irrational gains. That's why time in market is the most important factor. |
Anonymous
| There are always crashes. And there are always rebounds. People who invested heavily in equities over bonds or real estate since the 1990s have done phenomenally. I fully expect swings but also expect that over the next 25 years the equities will keep growing and outperform bonds and real estate. I don't need to tap into my funds during that time. |
Anonymous
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I mean realistically, where else will you invest money for returns over inflation? Instead of looking at equities in terms of P/E valuation, what if we look at it as supply and demand?
1. More millenials are into equities than a generation or two ago 2. Buying equities is so much easier, quicker and liquid than real estate, zero fees, less than 10 mins to set up a brokerage account, less than 5 mins to buy stocks, automatic investments etc. 3. For folks who diversify into gold or other alternative asests, typically allocate less than 50% of networth in those. 4. Our Goverment always bails out the stock market, by reducing interest rates or through other mechanisms 5. All the wealthiest of CEO's are paid in stock comp, so they will always motivated to keep it high |
Anonymous
We also have a second home, and have rented it out for the last two years and we are selling it when the tenants move out this spring. I am torn about this -- I don't want to bother with renting it out anymore and for personal reasons will be glad to see it gone, but it seems to make a lot of sense to keep some money in real estate right now. |
Anonymous
I, too, have moved money into bonds in the last week thinking “oh, well, unemployment is ticking up, there are massive layoffs reported, I’m not sure the official jobs reports are fully showing the clear picture, we have 37 trillion debt and are basically servicing that, we have tariffs that are shuttering small businesses, there is apparently an auto loan issue…all these potential catalysts for a large scale pullback and yet today I read that stocks are now poised for a “tech led rebound”. I feel like Michael Burry who recently shuttered his firm because he couldn’t accurately get his prediction of a cash to come true and just gave up. I want a crash because I want to buy stocks at a 50% discount. I want to move my bonds that aren’t making sht now into stocks, but I just am bearish when i zoom out and I am waiting for this crash to come. I feel good about moving my stocks into bonds because I locked in some good gains. I just need this crash to come sooner than later. These cyclical downturns are cleansing. I am also holding gold mutual funds. They’re mainly gold miner funds because apparently it’s just hard to find a fund that is pure bullion, but whatever. I am hoping those go up in 2026, so I can sell those as well once tech stocks crash and then I’ll buy a ton of VITAX and FSELX and wait 10 years for that to keep going. Stocks, especially tech and semi stocks, really are the place to be, but yeah they are way overvalued right now and we have too many recession like conditions for me to feel confident dumping a ton of money into them at present. I think we need to see the Ionq and Rigetti’s fail first and a large scale drop in retail investor confidence and a huge drop in values and then I’m back in. |
Anonymous
| Have you been paying attention the past 5 years? Bad news for business is actually good news for stocks. In that vein, I hope economic conditions continue to slowly crumble for the next decade so that I can lock in 100%+ gains. |
Anonymous
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This feels like the kind of thing that people will look back on and say "seems like they were trying to hide a bad thing!"
https://www.wsj.com/tech/meta-ai-data-center-finances-d3a6b464?st=YAL8rt&reflink=desktopwebshare_permalink |
Anonymous
Same. I rebalanced 529 plans because they are adequately funded and don't need to take on risk. I have 45% of my "investment portfolio" in commercial real estate, which is pretty decent cash flow and a nice hedge against a stock market crash. I have about 5% in cash equivalents, but the rest is in equities, and I continue to contribute to equities. I feel so out of my depth in market stuff. I can read and understand basic ideas, but no way I know enough to time the market. I lightly follow Bogleheads, which is a constant reminder to "stay the course," so I do. |
Anonymous
| During the dot com era valuations were often done on the basis of revenue multiples and had nothing to do with profit, cash flow, assets etc. The seven companies that have been driving the S&P are all very profitable. Are they overvalued? Yes, so there will likely be a reset at some point. A key in investing is diversification so when there is a correction the pain you feel will be modest compared to betting the ranch on just a few stocks. Remember, the tortoise ultimately beat the hare. |
Anonymous
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Most of us are average investors with maybe less than $1 mil invested. When you have this small amount invested, it's much easier to stick to one asset class. And here you want to hear or not, you have no choice but ride and die an index fund.
Those who have more substantial investments perhaps $2.5+ mil, can think about diversification. The truth is, the American system is set up so that we participants (directly or indirectly) in the stock market. We can't escape it. At some point the government will not be able to bail us out. Let's hope for the best that's all |