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Market starting to look overpriced?

goodguy1977

Member
Jan 5, 2011
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Is it me or is the market starting to look overpriced? Sentiment is extremely positive, commodities and equities are moving up. Is it justs me but we still do have a very large European issue, China is still trying to slow it's economy, India is a mess and the emerging markets are having their issue. The big issue for me is going forward with reduced demand from areas such as Europe (recession) and China (look at their 1 yr stock market performance) an overall global slowdown should cause a multiples compression. So valuations at these levels are starting to look very expensive. A short op?

Happy trading.
 

msog87

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Dec 11, 2011
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china will print alot of money to postpone slow growth and create inflation. the overall stock market is not overpriced bc stocks are inflation hedges, before the next big 2008 type decline ( which will be worse btw) central banks are gonna print alot ofmoney. the worst sector to be in is the financials. also, to show you how much value stocks have lost price a stock market in gold, for example the dow/gold ratio is around 8 ounces of gold, 10 years ago it was 40 ounces. so markets have lost aalot of value when priced in REAL MONEY, not printed paper. commodities have had a large sell off recently, you want to be in commodities themselves and commodity stocks. we are halfway through a commodity bullmarket that still has many years to go. I would not short anytime soon. there is a high probability we get qe3 and QE from the ecb. markets will rise, commodities will explode
 

goodguy1977

Member
Jan 5, 2011
791
0
16
Hi there,

Interesting view, from my understanding the Chinese government wants to continue slowing down the economy due to not only inflation concerns but with the civil unrest around the world they don't want an uprising. I don't think there is enough political will in the world right now to have central banks print money like there is no tomorrow. Scary thing is if the market is pricing it in, that could be a problem. As for stocks being an inflation hedge, that really depends on the sector. Inflation distorts everything especially financial assets. If the world does have the global slowdown in growth/recession? commodities will certainly fall from there current levels.

It's funny we have almost opposite views, but that's a market.. you need a buyer and a seller.
 

msog87

Banned
Dec 11, 2011
2,071
1
0
Hi there,

Interesting view, from my understanding the Chinese government wants to continue slowing down the economy due to not only inflation concerns but with the civil unrest around the world they don't want an uprising. I don't think there is enough political will in the world right now to have central banks print money like there is no tomorrow. Scary thing is if the market is pricing it in, that could be a problem. As for stocks being an inflation hedge, that really depends on the sector. Inflation distorts everything especially financial assets. If the world does have the global slowdown in growth/recession? commodities will certainly fall from there current levels.

It's funny we have almost opposite views, but that's a market.. you need a buyer and a seller.
china was tightening, but they have had some bad econ data roll in recently thus they have begun to ease monetary policy. stocks are inflation hedges bc they are real assets that go up in value as paper cash loses value. as far as central banks not printing ...they are printing like crazy! bank of england, the fed, japan, swiss, bank of china...all printing money. the ecb hasnt been printing money to buy bonds, but they have been increasing liquidity lending hundreds of billionsto zombie banks which creates inflation
 
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