Bubbles

Hi Friends,

It seems that you can't watch CNBC for more than 10 minutes before they start talking about a bubble - whether it be stocks or bitcoin. I know they are looking for catchy headlines that grab your attention so you watch (or click in the internet's case) but it is getting a little old for me.

When it comes to Bitcoin, fair value will be based on supply and demand so how can you call continued interest in the vehicle a bubble? As for stocks, yes they are trading above historical valuations in terms of EPS when the S&P is at 22x EPS and historical average is 15x, however, it also used to be that the average was 10x, then 12x, perhaps this is just an evolution to the valuations of a business - plus who wants to earn lots on their bottom line only to pay a lot of taxes? There are other metrics, and many companies are re-investing in their future by expanding research and product lines, which dilute their earnings - companies these days need to be flexible, nimble and move with the times - not the static companies of the past who are trying to hit their quarterly earnings so they can pay a dividend to their investors.

So I say, enough with the bubble talk. I will just keep buying.

Thanks for coming by,
Brian