Why is the market still going up?

[CA renter]

[quote=patientrenter][quote=CA renter]…
Don’t forget the effects of low interest rates and high leverage. IMHO, this can be a much more significant cause of bubbles than actual savings. The past couple of decades have seen a significant decline in interest rates and a significant increase in leverage.[/quote]

Lending moves savings, and bad lending can lead to too much savings being directed into a limited pool of assets, driving up the prices of those assets to bubble levels. However, we suffered an increase in the price of almost all assets. Homes and stocks all rocketed up to bubble levels.

The problem was not so much that we were diverting savings money from one type of asset to another. That could be fixed primarily by changing lending practices. We just had too much total savings coming in, and you can’t fix the asset bubble and bad lending that results unless you fix the aggregate mismatch between too much savings compared to the good investment opportunities.[/quote]

IMHO, money was/is too cheap (artificially suppressed interest rates) and leverage was/is too high. In addition to this, we have a growing wealth disparity in this country and the rest of the world that does indeed create “too much savings.” If we want to solve that problem, we will have to raise marginal taxes and eliminate the preferential treatment of investments/capital (dividend and LT cap gains tax, etc.) over labor. Not sure anyone has the cojones to do what’s right (IMHO).

[maktbone]

[quote=DataAgent]If you like dividend-paying companies that are currently hiring people, look at utility companies. Sempra Energy – Ticker: SRE (parent of San Diego Gas & Electric) is a utility company.[/quote]

I must point out that Sempra does not perfectly fit the profile of a pure utility company–around 50% of Sempra’s earnings come from its non-utility subsidiaries whose earnings are “at-risk,” unlike its regulated utilities that have guaranteed rights to collect revenues from customers and can thus provide returns to shareholders.*

I encourage you to read the annual 10-K filing and do your due diligence before investing in any corporation. If you do not know how to read financial statements then you have no business purchasing individual stocks as you are speculating and not investing. You would be better served parking your hard-earned $$$ in an index fund or ETF.

*Disclosure: I am a Sempra employee but the views I express here are my own and not those of my employer. I am neither advocating for or against the purchase of Sempra stock.

[maktbone]

[quote=DataAgent]If you like dividend-paying companies that are currently hiring people, look at utility companies. Sempra Energy – Ticker: SRE (parent of San Diego Gas & Electric) is a utility company.[/quote]

I must point out that Sempra does not perfectly fit the profile of a pure utility company–around 50% of Sempra’s earnings come from its non-utility subsidiaries whose earnings are “at-risk,” unlike its regulated utilities that have guaranteed rights to collect revenues from customers and can thus provide returns to shareholders.*

I encourage you to read the annual 10-K filing and do your due diligence before investing in any corporation. If you do not know how to read financial statements then you have no business purchasing individual stocks as you are speculating and not investing. You would be better served parking your hard-earned $$$ in an index fund or ETF.

*Disclosure: I am a Sempra employee but the views I express here are my own and not those of my employer. I am neither advocating for or against the purchase of Sempra stock.

[maktbone]

[quote=DataAgent]If you like dividend-paying companies that are currently hiring people, look at utility companies. Sempra Energy – Ticker: SRE (parent of San Diego Gas & Electric) is a utility company.[/quote]

I must point out that Sempra does not perfectly fit the profile of a pure utility company–around 50% of Sempra’s earnings come from its non-utility subsidiaries whose earnings are “at-risk,” unlike its regulated utilities that have guaranteed rights to collect revenues from customers and can thus provide returns to shareholders.*

I encourage you to read the annual 10-K filing and do your due diligence before investing in any corporation. If you do not know how to read financial statements then you have no business purchasing individual stocks as you are speculating and not investing. You would be better served parking your hard-earned $$$ in an index fund or ETF.

*Disclosure: I am a Sempra employee but the views I express here are my own and not those of my employer. I am neither advocating for or against the purchase of Sempra stock.

[maktbone]

[quote=DataAgent]If you like dividend-paying companies that are currently hiring people, look at utility companies. Sempra Energy – Ticker: SRE (parent of San Diego Gas & Electric) is a utility company.[/quote]

I must point out that Sempra does not perfectly fit the profile of a pure utility company–around 50% of Sempra’s earnings come from its non-utility subsidiaries whose earnings are “at-risk,” unlike its regulated utilities that have guaranteed rights to collect revenues from customers and can thus provide returns to shareholders.*

I encourage you to read the annual 10-K filing and do your due diligence before investing in any corporation. If you do not know how to read financial statements then you have no business purchasing individual stocks as you are speculating and not investing. You would be better served parking your hard-earned $$$ in an index fund or ETF.

*Disclosure: I am a Sempra employee but the views I express here are my own and not those of my employer. I am neither advocating for or against the purchase of Sempra stock.

[maktbone]

[quote=DataAgent]If you like dividend-paying companies that are currently hiring people, look at utility companies. Sempra Energy – Ticker: SRE (parent of San Diego Gas & Electric) is a utility company.[/quote]

I must point out that Sempra does not perfectly fit the profile of a pure utility company–around 50% of Sempra’s earnings come from its non-utility subsidiaries whose earnings are “at-risk,” unlike its regulated utilities that have guaranteed rights to collect revenues from customers and can thus provide returns to shareholders.*

I encourage you to read the annual 10-K filing and do your due diligence before investing in any corporation. If you do not know how to read financial statements then you have no business purchasing individual stocks as you are speculating and not investing. You would be better served parking your hard-earned $$$ in an index fund or ETF.

*Disclosure: I am a Sempra employee but the views I express here are my own and not those of my employer. I am neither advocating for or against the purchase of Sempra stock.

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