Author Topic: What are your bubble indicators?  (Read 3681 times)

ChpBstrd

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Re: What are your bubble indicators?
« Reply #50 on: August 24, 2020, 01:51:19 PM »
IMO the US markets, led by Nasdaq stocks, are now clearly transitioning from a Fed-backed recovery into a full blown speculative asset bubble.

The telling characteristic is the lack of any significant corrections in Nasdaq that characterises a normal healthy bull market. When a market does 70% without pausing for breath that is bubble behaviour.

With a falling vix, it might be time to buy calls on the nasdaq index or QQQ while the bubble inflates. Massive leverage. Limited downside. A chance to get out when things get super crazy (as opposed to just crazy).

bacchi

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Re: What are your bubble indicators?
« Reply #51 on: August 24, 2020, 08:31:25 PM »
IMO the US markets, led by Nasdaq stocks, are now clearly transitioning from a Fed-backed recovery into a full blown speculative asset bubble.

The telling characteristic is the lack of any significant corrections in Nasdaq that characterises a normal healthy bull market. When a market does 70% without pausing for breath that is bubble behaviour.

With a falling vix, it might be time to buy calls on the nasdaq index or QQQ while the bubble inflates. Massive leverage. Limited downside. A chance to get out when things get super crazy (as opposed to just crazy).

Or buying calls on VIX or buying puts on QQQ.

cschx

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Re: What are your bubble indicators?
« Reply #52 on: August 25, 2020, 02:42:11 PM »
With a falling vix, it might be time to buy calls on the nasdaq index or QQQ while the bubble inflates. Massive leverage. Limited downside. A chance to get out when things get super crazy (as opposed to just crazy).

Funny, I just saw someone refer to this approach as "the WSB version of index investing."

phildonnia

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Re: What are your bubble indicators?
« Reply #53 on: August 25, 2020, 03:03:03 PM »
Both Apple and Tesla stocks surging on news of a stock-split.

Not an earnings report, not a new product line, not even an inspirational speech outlining a new executive vision. 

A stock-split.

One of two things is at work: either investors have absolutely no idea how a stock-split affects the value of the company (it doesn't), or something other than fundamentals is now the basis of stock price.

In either case, I'm expecting Dr. Reality to give some lessons on the topic in a few moments.

ice_beard

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Re: What are your bubble indicators?
« Reply #54 on: August 26, 2020, 12:24:48 AM »
I have co-workers who own apple and tesla and are convinced they are investing geniuses.  I asked them if they know what all those acronyms are on the screen of the TSLA and APPL tickers on Robinhood.  No idea what a PE ratio or a market cap is.  I ask about Teslas PE ratio and how many cars they have sold.  I ask...  "What's APPL got that is going to maintain that stock price?"  "5g!!"  "But everyone else is selling a 5g smart phone too, Apple doesn't sell the infrastructure that is needed to bring 5g to market, they are the ones who are going to kill it."  "They also own the most expensive office space and retail space in the country and it's not even in use right now", I retort.  Just that "well, these two stocks have done really well for me".  And I'm sure they have.
 
I really think there will be a significant institutional pull out at some point in time, maybe soon.  There is a ton of profit ready to be taken.  I would definitely have a stop loss set.  What will be the catalyst(s) for the sell off? 

kriserts

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Re: What are your bubble indicators?
« Reply #55 on: August 26, 2020, 05:40:58 PM »
When the NY Times starts running articles on how people with very little savings cashed out to buy whatever's having a run. So, in the real estate bubble, a housekeeper in Jamaica Queens bought four houses. In the last Bitcoin run up, same thing, an older woman whose kids begged her not to cash in her savings did so to buy Bitcoin. I believe she was also a housekeeper. And after that, an indicator to me is when my friends with no interest in investing want to buy into the bubble (like Bitcoin).