Reply to Dow below 40000 by end of the year

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]The Dow has been levitating on AI hopium for a very long time. P/E ratios are completely out of whack from historical norms. I recall 2007/8 when everyone said housing prices never go down. And then they did and the whole house of cards collapsed.

Who knows whether the war with Iran will be the catalyst this time. But we are well overdue for a reality check. It is never different this time. From the tulip bubble in the 1600s to today, markets get irrationally frothy and always collapse eventually. [/quote]

There was a step change in PE ratios after the 90s, which was a result of how the world changed with the internet.

I would argue the change from AI will be even bigger

https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart[/quote]

According to this chart, we are not even close to historically high P/E ratios that triggered a large sell off. US is a major exporter of energy. Other countries have large strategic reserves for weather the temporary deficit and today US energy chief confirmed the strikes will be temporary and the prices will fall in a month. They won't be risking midterm elections.

And the private credit crisis is not spread over all sectors of the economy. Let the rich guys/specialized investors in these vehicles loose their money who cares.

And no, I don't believe the US will be any safer than other countries to invest. It is is stable and Nazi Germany as long as it continues present existential threat to other economies and resolve diplomatic conflicts with military. Developed countries of Europe and Asia will distance and try to become more undefended from dollar and US politics going forward
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