Why the hell is the stock market still going on a tear?

What’s the bull perspective? (If you can’t come up with one, then you are only seeing half the picture).

OP are you saying the market is wrong? If there is any mispricing, it will correct.

Market is so much more than the basket of tech stocks that have done well during covid.

As an example, If you look at historical cycles, commodities always do well at some point. Particularly when you have wars and pandemic reopenings as catalysts. Whoever told you this time will be different, lied.

Everything I am seeing makes perfect sense to me

poopooplatter wrote: ↑ Like seriously. We've got out of control inflation and energy prices. Globalization going in reverse. Supply chain issues that won't go away. Rate hikes (probably) coming out the wazoo. Yet the market keeps going on these tears, with the occasional little pause. Like it honestly makes zero sense.

Todays big news

https://www.bloomberg.com/news/articles/2022-03-23/u-s-restores-64-of-product-exclusions-from-trump-china-duties

Meh it was like one week of green last week out of 8 or 9 the weeks before and who knows how this week will finish. Bear markets can have green weeks too. Remember this before you try to think you should start buying puts.

General market conditions due to inflation/energy costs on profit margins along with less cheaper debt are only starting. Could easily go back down to 4000 for the S&P or maybe it'll just chop sideways for an year I dunno I DCA index funds and bitcoin.

I mean inflation is a risk, but there is also pent-up demand from the pandemic. We also have record low unemployment. Yes inflation is high, but demand hasn't dropped yet. Earnings is still intact.

Inflation in itself doesnt mean stocks go down. If anythIng, corporate assets are worth more in dollar terms so some action could be explained from that. Increased oil and resource revenues for Canada is also a positive for domestic equities.

zoom out.. all will be ok

More buyers than sellers

xgbsSS wrote: ↑ I mean inflation is a risk, but there is also pent-up demand from the pandemic. We also have record low unemployment. Yes inflation is high, but demand hasn't dropped yet. Earnings is still intact.

Inflation in itself doesnt mean stocks go down. If anythIng, corporate assets are worth more in dollar terms so some action could be explained from that. Increased oil and resource revenues for Canada is also a positive for domestic equities.

We talking about the whole global market. Ukraine and rate hike still going strong.

spike1128 wrote: ↑ We talking about the whole global market. Ukraine and rate hike still going strong.

Yeah demand hasn't collapsed in most of the world. We havent seen earnings drop, nor job destruction. We could see a slowdown, sure. But the only indicator so far is inflation and geopolitics.

Too much money in people's hands. Also inflation helps the market, same as everything else going up, the markets go up, more profits etc.

I see your point though as evaluations dont make sense but as long as there are buyers it will go up, it's a gamble and demand driven. Look at GME.

In the long run the markets will always go up, say in 30 years from now Dow will be 60k.

Of course they will be dips and corrections in between so keeping some cash handy it's a good idea. Just be patient and dont time the market.

The “Adam Smithers” believe in the “invisible hand” of the marketplace.

Well, that invisible hand is attached to a greedy, frightened sociopath. That greedy, frightened sociopath keeps grabbing things until one day it gets too frightened. It hasn’t gotten frightened enough yet.

Just got oversold. Q's still down 13% for the year.
Add inflation and market is down 20%. Add in real inflation and investment is down 30%.

The market won't beat inflation for 2022.

KingKuba wrote: ↑ Just got oversold. Q's still down 13% for the year.
Add inflation and market is down 20%. Add in real inflation and investment is down 30%.

The market won't beat inflation for 2022.

Still pretty scammy for market to tear right now. Maybe when Ukraine war is over and rates are stable.

Like most things in life...it's complicated. Don't try to create a single factor explanation. Off the top of my head:

-Inflation affects consumer spending patterns but keep in mind this creates winners and losers. Some businesses will do better under inflation than others. Moreover, inflation means money is losing value, which actually means there's MORE reason to hold assets instead of letting cash idle

-Global supply chain issues: Yes there are issues. But that also means at some point in the future they will be rectified.

-Rate hikes: So what? It's a steady rise in rates. We're not Russia. We don't spike our rates by double digits overnight. Plenty of time for markets to react.

-Increased accessibility for trading. I get so many ads targeting 20 somethings to get into crypto and trading and these ads frame it almost as if you're betting on sports teams. There must be increased demand for buying stocks because of this.

-Company fundamentals: Are companies really crashing and burning? No they aren't. Lots of companies struggled through the pandemic. But some even thrived. Most have adjusted and perhaps even learned to operate with a more lean structure. If you look at dividend yields for example, many companies have raised yields consistent with the current stock price. To me, cash is king. If a company is confident enough to raise dividends, then I shall have confidence in that company's cash flow too.

-Many government supports through the pandemic. Lots of money supply was created. Where did it go? Well...I had a tenant who didn't pay rent and I saw him buy a PlayStation (saw the box in the corner of my eye). True story. So I guess even some low income people got into stocks through those subsidies? It will catch up to taxpayers eventually...I guess...but not now.

-General optimism from pandemic restrictions lifting around the world.

I know my writing tends to be long. But hey...if you put money on the line, it's always better to think DEEPLY right? I find the vast majority of people way too shallow, trying to attribute issues to a single factor explanation. As if making a single change will send society into utopia...I could probably write another page if I sink more time into the topic and do more research.

People forget the usual TINA - "there is no alternative"

"Why the hell is the stock market still going on a tear?"

I would have thought this Thread more appropriate last year when I was selling down Tech stocks at 30X>40X's Earnings / Cashflows with known IR risks. "TINA" was used the last couple years for Tech investing (wrongly). I anticipate most investors are still overexposed to US (thus Tech) that has been in a down to sideways move since January so this thread would not reflect those situations.

War premium aside, a number of investor demographics have never been in a period of "rising" IRs. Valuing Tech is a bit of a mugs game right now as CBRs (QT) are just starting to reflate.

There's no such thing as as war premium. The market is going up because of hedge funds. It'll drop.... the 2-10 year spread dropped significantly to 0.17 suggesting we are on course for a recession which will wake people up as it seriously affects cash flow.

we wouldn't be facing a recession if biden got his BBB plan thru. Powell is left fixing biden's failures.