Market bubbles are all fun and games on the way up...

MGLICKER

.....but are a disaster in retreat. The same schmucks that bought homes for twice the build cost and Silver at $49.50 are gobbling up the Nasdaq at 100 times the market dividend yield.

Guess P.T. Barnum was correct.

Baley

Thank goodness for the shmucks! To whom would we be able sell our outperforming assets when they bubble up, without the shmucks??

MGLICKER

<< <i>Thank goodness for the shmucks! To whom would we be able sell our outperforming assets when they bubble up, without the shmucks?? >>



In 2014 the answer would be the fed through their partner GS.

renman95

<< <i>.....but are a disaster in retreat. The same schmucks that bought homes for twice the build cost and Silver at $49.50 are gobbling up the Nasdaq at 100 times the market dividend yield.

Guess P.T. Barnum was correct. >>



"Schmucks" is far too harsh. I prefer dumb-masses.

MGLICKER

Though Netflix is a steal at 322 times earnings.

renman95

<< <i>Though Netflix is a steal at 322 times earnings. >>



It is considering AMZN is 1,465 times!

bidask

<< <i>Though Netflix is a steal at 322 times earnings. >>

Yeah, that Netflix.....only up another 59 points in afterhours.

MGLICKER

<< <i>

<< <i>Though Netflix is a steal at 322 times earnings. >>

Yeah, that Netflix.....only up another 59 points in afterhours. >>



My point exactly (the after hours stock jump prompted the stock mention).

Company posted quarterly earnings a dime per share over estimates, which with about 50 million shares outstanding, is $5 Million.

The stock jumped 59 points on the news which equates to nearly $3 Billion in market capitalization. That equals 600 times the increase in earning.

Nice company but the guy that gets into the stock on Thursday could easily lose 90% of his "investment" when the next technology emerges and the air escapes from this over bloated balloon.

Pokermandude

I read an article the other day which had an interview with the CEO of Netflix. He even says that the company's shares are overvalued. He also says that people aren't listening to him when he says this, just like people don't listen to CEOs who say their company's shares are undervalued (his words!).

MGLICKER

<< <i>I read an article the other day which had an interview with the CEO of Netflix. He even says that the company's shares are overvalued. He also says that people aren't listening to him when he says this, just like people don't listen to CEOs who say their company's shares are undervalued (his words!). >>



Problem is, there is only one entry price at a given time on each stock.

Netflix and Amazon and Tesla have a lot of fans that don't understand valuation and want to get in now.

Baley

Perhaps they understand momentum

carew4me

Things can change...quickly.

Certainly this group should know that...April 2011 anybody?

In a span of a week we have gone from

"Valuations are actually low historically...plenty of room left in this bull"

to

"The world is catching emerging markets flu': UK and US shares take a hit as plunging currencies worry global investors"

MGLICKER

<< <i>Perhaps they understand momentum >>



Some certainly do and have profited handsomely. The key is knowing when to get out (and in for that matter).

I am referring to the investors that like a product, but do not understand how to value an entity.

A friend asked me about Noodles and Company (NDLS) in the Spring. The restaurant chain had 200 units operating and generated a profit.

The PE though was 200. I explained to my friend that the company would need to grow to 2000 stores with the same margin to get to a more reasonable PE of 20.

carew4me

The key is knowing when to get out (and in for that matter) ...Captain Obvious

I am sure you are a great equity investor, but I give zero credibility to any statements made after the fact.


Tons a profits were reaped in this bull. Many people sat on the side for the past convinced that
QE and national debt made this bull a mirage. They lost out on Baley's momentum.

If you are tryingt o convince me that you rode the bull and have exited perfectly to ride the bear....well tha is P.T. Barnum comes in.

MGLICKER

<< <i>The key is knowing when to get out (and in for that matter) ...Captain Obvious

I am sure you are a great equity investor, but I give zero credibility to any statements made after the fact.


Tons a profits were reaped in this bull. Many people sat on the side for the past convinced that
QE and national debt made this bull a mirage. They lost out on Baley's momentum.

If you are tryingt o convince me that you rode the bull and have exited perfectly to ride the bear....well tha is P.T. Barnum comes in. >>



You missed my point. I have not been long any equities for a long, long time. The new FASB rules have made equities a mine field for all but the insiders.

I acknowledged to Baley that some market traders are saavy enough to profit on markets even if they believe that they are irrationally valued. That is true of underpricing as well as overpricing.

My point was that many investors like a product such as the Tesla Car and buy the stock for that reason only. 20 or 200 or 2000 times projected earnings are not a factor. They are often shocked as profits rise and the stock price declines, while attaining a more logical multiple.

roadrunner

<< <i>Thank goodness for the shmucks! To whom would we be able sell our outperforming assets when they bubble up, without the shmucks?? >>



A lot of those shares are being sold back and forth between HFT computers owned by heavy duty speculators....not Joe Six Pack. The "machines" don't care anything about schmucks. They just do what they are
programmed to do. A computer is not a schmuck. And those "schmuck" computers will sell on the way down when the algo tells them to. This time the market bubbling is the work of computers, not J6P. Joe got
so smoked out in the last few drops (2000-2002 and 2008-2009) that he didn't want much to do with the next one. The HFT's understood that the momentum was computer-induced, not by Baley's buying. This is
similar to the momentum we saw in key date coin prices from 2004-2008. Most of that was flipping between dealers and speculators....not Joe Coin Collector adding one single specimen to his set. Most key dates are
owned by dealers. I'd say that most shares are owned by the computers. Though they certainly are trying to convince Joe to finally jump into the market NOW to hand off their shares. At some point those other computers
might not want shares.

derryb

It's 2007 once again. 2008 will be here before you know it.

MGLICKER

<< <i>It's 2007 once again. 2008 will be here before you know it. >>



Wonder if Yellen expected a smooth transition?

MGLICKER

Interesting to see bond yields decline with the Dow. That may offer some support for the blue chips on the way down. Nasdaq with the high multiples though are in trouble.