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‘It’s impossible to say when and how it ends. But with Gajveer assets being bought by the Fed and always achieving a softening on its 2% inflation target, the bubble is definitely one of the biggest in the history of the stock market. ‘
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Andrew Parlin, an investment adviser and founder and chief investment officer of Washington Washington Peak, has joined the growing chorus of barish pundits in a recent op-ed in the Financial Times.
The piece caught the attention of society general economist Albert Edwards, who is known for presenting some of the darkest markets:
As an investor who navigated Japan’s historic bubble decades ago, Parlin said he was experiencing “dezu woo” in the current top-heavy environment.
“At the time, anything with exposure to real estate was at the center of the speculation.” “Now, America’s hottest regions have almost all disruptive technologies. The weather has risen in stocks with real, or alleged, cloud exposure, digital payments, electric vehicles, plant-based food or anything to do with the stay-at-home economy. “
As Parlin sees it, the stories surrounding the “hottest disruptors” are as unrealistic as Japan’s crazed insensitive real estate investments.
“Bubbles form around individual stocks and sectors. More and more stocks are being infected in the over-widening concentration circles, he said. “Wildly exaggerated stock stories push the connection between fundamental analysis and stock prices.”
He told Tesla TSLA,
There is an example of “these extra capsules” that will ultimately have a volatile effect on the wider market.
The price-to-book ratio in Japan in the late 1980s was largely speculative risk, where assets were all the rage, so today the U.S. The ratio of sales to very high prices in highlights the complete lack of published reality. “The highest growth rate in stocks,” Parlin wrote.
This metric, he explained, is supposed to be fairly stable, and the stock is seen to be more than 10 times the ratio of sales to prices. But that’s certainly not the case these days.
According to Bloomberg data cited in the P-Ed, 530 of the 8,513 U.S. stocks listed common stocks with sales more than 10 times higher. “Only once in history have we seen a large share of stocks in sales more than 10 times,” Parlin noted.
When was that You guessed it: March 2000.
“The point is that the ratio of sales to prices in the assortment sector does not remain there, maintaining a price of more than ,000 100,000 more than a tulip bulb in 17th century Holland.” “It simply came to our notice then. They do not undergo smooth and endogenous contractions until they disappear. Instead, they continue to expand until they explode. This is the reason why their eruptions happen more often than shocking, spectacular and confusing. ”
Tuesday’s decline may not have been “shocking” but key indicators were definitely red at the time of the last check. Dow Jones Industrial Average DJIA,
Was down more than 400 points, while the S&P 500 SPX,
And Nasdaq Composite COMP,
Was hit harder on a percentage basis.
As for Tesla, the stock was trading below 14%.
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