[quote=no_such_reality]I think we are suffering a bit from not updating our investing yardsticks We are essentially still using criteria and expectations from 100 years ago. Sure we’ve shifted from dividend stocks to growth stocks accepting lack of dividends but we haven’t shifted our thinking from investment dollars being expensive to being cheap. The shift from retirement funds to 401ks and the growth of the state government funds have flooded investable products with cash.
Many years ago I read an article by a person saying stocks should have PEs that make them look more like bonds. I thought they were nuts at the time but I’m beginning to wonder if the stock market is more like the housing market with money being both cheap and plentiful.
Even if the market pulls back 30%. How fast will it come roaring back 40%?
Cut QE out and the market slows until the first companies put in a decent earning announcement.
Keep in mind there are twelve million high net worth individuals holding $46 trillion. And CalPers has over $260 billion representing 1.7 million with cash inflows of $12 billion a year for a net drain of about $5 billion annually. So while CalPers is a gorilla, they’re a dot in the aggregate[/quote]
Exactly. Too much money concentrated into too few hands all looking for places to grow their money into more money, which means that price of investable assets are too high, relatively speaking.
