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The Mystery of High Stock Prices

"Why is the market doing so well when the economy is doing so poorly?", asks Steven Rattner in an opinion piece in today's edition of the NYT:

https://www.nytimes.com/2020/07/03/opinion/stock-market.html?action=click&module=Opinion&pgtype=Home...

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Re: The Mystery of High Stock Prices


@fred495 wrote:

"Why is the market doing so well when the economy is doing so poorly?", asks Steven Rattner in an opinion piece in today's edition of the NYT:

https://www.nytimes.com/2020/07/03/opinion/stock-market.html?action=click&module=Opinion&pgtype=Home...

        Usually in the short run there is no connection to actual earnings. But this time is unique because  a media and political food fight are mixed in with a viral economic problem. A year ago we were in the “Goldilocks” economy remember?

         The reason the market is going “up” is smart money is picking up shares at bargain prices and has the patience to wait it out and know as always this to shall pass.

          The toxic culture of course will prolong everything, good and bad.

         

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Re: The Mystery of High Stock Prices

I just stumbled onto a fund fidelity millennium. The manager has gone deep value. Not sure if he was always value. But 10 year returns of fund suggest otherwise.

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Re: The Mystery of High Stock Prices

I just don't see equities as expensive. The forward P/E of our equity allocation is 18.8. 

Investment grade bonds are ridiculously expensive. The P/E of our FI allocation is 80.6. Yield = 1.24%.

10 yr CAGR of USD CPI = 1.65%.

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