News1 min ago
Asia Markets Join Global Stock Plunge
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That's the trouble with the system. It's too volatile and reacts to both fear and over-enthusiasm. The system needs more hysteresis, prevention of just popping in and out of investments on whim, a requirement to support companies for a minimum period if buying into it so forcing checking it has good long term prospects.
Looks as if the "experts" have been expecting it for a while. Stock prices have been over inflated for some time, all over the World.
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Couple of good articles, without the spin.
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interest rates are starting to nudge upwards, markets are panicking that there won't be any more free money around. It's possible the Obama boom is ending (markets don't change course overnight just because a new president takes office; it typically takes very roughly a year), but that would be reflected in slow decline over a period of time rather than one-day volatility.
World economy growth was very recently upgraded:
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Look no further than my two friends, Mr. Gates & Mr. Buffett.
This is Gates’ reddit post a few weeks ago:
jpfg259
1212 points
Do you think in the near future, we will have another financial crisis similar to the one in 2008?
[–]thisisbillgates[S] 2474 points
Yes. It is hard to say when but this is a certainty. Fortunately we got through that one reasonably well. Warren has talked about this and he understands this area far better than I do.
Despite this prediction of bumps ahead I am quite optimistic about how innovation and capitalism will improve the situation for humans everywhere.
Here is a link to the thread - I’m Bill Gates, co-chair of the Bill & Melinda Gates Foundation. Ask Me Anything. • r/IAmA
So he obviously doesn’t comment on when this is going to happen as it isn’t a top concern for him but the writing is on the wall…now.
Do you know that Warren Buffett most likely thinks the stock market is headed for a precipitous decline?
“In our search for new stand-alone businesses, the key qualities we seek are durable competitive strengths; able and high-grade management; good returns on the net tangible assets required to operate the business; opportunities for internal growth at attractive returns; and, finally, a sensible purchase price.
That last requirement proved a barrier to virtually all deals we reviewed in 2017,as prices for decent, but far from spectacular, businesses hit an all-time high.”
Check out the 2017 Berkshire Hathaway Shareholder letter here - http://
That quote is from the Oracle of Omaha himself in his annual letter this past weekend!
Buffett isn’t buying a damn thing right now and you shouldn’t either!
Berkshires cash position at the end of 2017 was $116 Billion!
Right now with that much cash he could buy any one of 465 out of 500 S&P companies.
People like him don’t get rich when valuations are stretched….
The time to buy is when prices crash, when the highest quality assets can be acquired for peanuts.
As sure as the sun rises each day, prices will decline. Asset prices always move in boom and bust cycles.
Berkshire Hathaways cash position has increased over 35% from the previous year…thats huge!!!
It looks as if he is preparing for a major decline and his actions are speaking louder than words.
Here are some additional reasons why the market has peaked:
1 - Stocks still have rich valuations today, especially the FAANGs. P/Es are high compared to historical averages.
2 - Over the last several years, corporations have used leverage for financial engineering rather than boosting productivity. US corporate debt levels are at an all-time high (above $6 trillion or about 31% of GDP). This excess leverage is fine when interest rates are low, but it can be deadly in a recession. In addition, stock repurchases don’t have the same impact on profits than capital investments.
3 - Interest rates are expected to increase as a result of the Fed’s tightening policies. Treasury issuance will likely increase over the next few years. Unfortunately, this may coincide with lower demand for US debt from both international and domestic buyers.
4 - Many asset categories are currently in bubble territory and prone to downward adjustments: growth stocks, bonds, real estate in many markets, arts, collectibles, and luxury goods, and cryptocurrencies.
5 - Geopolitical risks are not insignificant (North Korea, Iran). This one I feel is completely overlooked.
6 - Heightened risks of protectionism and trade wars.
If you want to prepare yourself for the decline that both Buffett & Gates see, I encourage you to check out this traders twitter feed. His calls have been nothing short of accurate.He’s calling for a monster move down, which is similar to what I’m sure Uncle Warren is expecting.
Don’t sit back down on your couch after you read this….TAKE ACTION, you can profit off of this decline if you know how to handle it.
https:/
This is Gates’ reddit post a few weeks ago:
jpfg259
1212 points
Do you think in the near future, we will have another financial crisis similar to the one in 2008?
[–]thisisbillgates[S] 2474 points
Yes. It is hard to say when but this is a certainty. Fortunately we got through that one reasonably well. Warren has talked about this and he understands this area far better than I do.
Despite this prediction of bumps ahead I am quite optimistic about how innovation and capitalism will improve the situation for humans everywhere.
Here is a link to the thread - I’m Bill Gates, co-chair of the Bill & Melinda Gates Foundation. Ask Me Anything. • r/IAmA
So he obviously doesn’t comment on when this is going to happen as it isn’t a top concern for him but the writing is on the wall…now.
Do you know that Warren Buffett most likely thinks the stock market is headed for a precipitous decline?
“In our search for new stand-alone businesses, the key qualities we seek are durable competitive strengths; able and high-grade management; good returns on the net tangible assets required to operate the business; opportunities for internal growth at attractive returns; and, finally, a sensible purchase price.
That last requirement proved a barrier to virtually all deals we reviewed in 2017,as prices for decent, but far from spectacular, businesses hit an all-time high.”
Check out the 2017 Berkshire Hathaway Shareholder letter here - http://
That quote is from the Oracle of Omaha himself in his annual letter this past weekend!
Buffett isn’t buying a damn thing right now and you shouldn’t either!
Berkshires cash position at the end of 2017 was $116 Billion!
Right now with that much cash he could buy any one of 465 out of 500 S&P companies.
People like him don’t get rich when valuations are stretched….
The time to buy is when prices crash, when the highest quality assets can be acquired for peanuts.
As sure as the sun rises each day, prices will decline. Asset prices always move in boom and bust cycles.
Berkshire Hathaways cash position has increased over 35% from the previous year…thats huge!!!
It looks as if he is preparing for a major decline and his actions are speaking louder than words.
Here are some additional reasons why the market has peaked:
1 - Stocks still have rich valuations today, especially the FAANGs. P/Es are high compared to historical averages.
2 - Over the last several years, corporations have used leverage for financial engineering rather than boosting productivity. US corporate debt levels are at an all-time high (above $6 trillion or about 31% of GDP). This excess leverage is fine when interest rates are low, but it can be deadly in a recession. In addition, stock repurchases don’t have the same impact on profits than capital investments.
3 - Interest rates are expected to increase as a result of the Fed’s tightening policies. Treasury issuance will likely increase over the next few years. Unfortunately, this may coincide with lower demand for US debt from both international and domestic buyers.
4 - Many asset categories are currently in bubble territory and prone to downward adjustments: growth stocks, bonds, real estate in many markets, arts, collectibles, and luxury goods, and cryptocurrencies.
5 - Geopolitical risks are not insignificant (North Korea, Iran). This one I feel is completely overlooked.
6 - Heightened risks of protectionism and trade wars.
If you want to prepare yourself for the decline that both Buffett & Gates see, I encourage you to check out this traders twitter feed. His calls have been nothing short of accurate.He’s calling for a monster move down, which is similar to what I’m sure Uncle Warren is expecting.
Don’t sit back down on your couch after you read this….TAKE ACTION, you can profit off of this decline if you know how to handle it.
https:/
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