Bubble Update: Stocks Are Now at 1999 Bubble Levels (Guess What’s Next)
Remember the 2007 Bubble?
Remember how everyone said that it really wasn’t that big of a bubble because stocks weren’t as expensive as they had been during the previous bubble (the Tech Bubble).
We all remember how that turned out: the bubble burst leading to the greatest financial crisis in 80 years.
Well, today’s bubble is WAY larger than that of 2007. And arguing that stocks are cheaper than they were during the Tech Bubble doesn’t hold water anymore either.
Below is a chart showing the S&P 500’s Price to Sales ratio (also called the P/S ratio). As you can see, based on this metric, the 2007 Bubble is a mere blip. We’re now in territory not seen since the 1999-2000 Bubble.
Why does this matter?
Earnings, cash flow, and book value are all financial data points that can be massaged via a variety of gimmicks. As a result of this, valuing stocks based on Price to Earnings, Price to Cash Flow, and Price to Book Value can often lead to inaccurate valuations.
Sales on the other hand are all but impossible to gimmick. Either money came in the door, or it didn’t And, if a company is caught faking its sales numbers, someone is going to jail.
So the fact that stocks are now trading at a P/S ratio that matches the Tech Bubble (the single largest stock bubble in history) tells us that we’re truly trading at astronomical levels: levels associated with staggering levels of excess.
What does that mean for stocks?
We’re going to have the 3rd and worst crisis in 20 years.
A Crash is coming…
And smart investors will use it to make literal fortunes.
Original source http://gainspainscapital.com/2017/07/13/bubble-update-stocks-now-1999-bubble-levels-guess-whats-next/
Muhahahaahahahaaaa !!!! Oh I mean darn !!! At the present I've only put 150.00 into bittrex just to start learning with out losing almost a days pay . I know I've lost fiat but I am looking at acquiring more Steem then making money now . I say give it a year or two kinda like a fruit tree plant it wait a year , prune , watch grow, harvest yummy . That's the plan , don't tell !! lol
Do you know how many articles have been written predicting a crash over the last 8 years? Do you realize that everyone of those articles have been completely wrong? Do you realize that 90% of the archived crash articles can no longer break even due to the latest up moves in the market? Have you heard of decay, contango, tracking errors, and standard deviation? Do you understand that these forces reduce your chance of breaking even when you predict a market crash? Do you know that 3 market crashes in a 20 year window has never happened before? Do you know that the great recession was an event that only happens once every 77 years according to the past records? This is crash prediction number 12,488,473,884 online compared to the 15,743 bullish articles written over the last 8 years. Can anybody say "Click bait?"
I do hope you are right but sadly I think you are wrong.
Sadly, I am talking about what has been happening in the past and past history cannot be proven wrong.
Time will tell