Source: EcPoFi
Screw it, I’m all in!
March 5, 2015 10:30am by Barry Ritholtz
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Biotech and healthcare generally certainly look overbought here but not so much for the rest as far as I can tell. Looks more like late mid-cycle to me: Maybe trim some fattened positions but keep on ride’n.
LMAO!!! This is so…..true…..
The QOTD from Bill Gross made me laugh.
“Dollar depreciation leads to higher inflation and ultimately forces foreign creditors to question their rationale and indeed their sanity for continuing purchases of U.S. Treasuries.”
Don’t know much about history, don’t know much macroeconomy ….
Nobody knows. Anyone who says they know is lying or ignorant probably both.
Stick to your asset allocation through thick and thin and you will do great.
These guys are talking their book. They are short, want people to sell so they make a little money.
Read the sports pages, or better yet a good book.
This graph clearly shows why I am heavily invested in liquor stocks.
Barrels or firkins?
Yes, this is great and so true. I also have noticed about “screw it I’m all in” time people start bragging about how much they’ve made buying this stock or that stock. When I start hearing these kinds of comments, it is usually indicative of something that isn’t good. I agree nobody knows for sure, it is just a matter of probabilities. I’ve held biotech and health care for a long time. Might be time to unload these puppies especially biotech. Looks speciously probable that these are bubblicious/frothy to me.
Let me count the ways I love this chart of truth. There will never be one better.
It’s ALL about the story!
Interesting chart (with a lot of funny annotations) and also the responses to it, with most (all?) of the commenters reacting solely to the price movement, salivating in Pavlovian fashion at the mere hint of a “bubble”.
Nobody seems to notice that in the first “Screw it, I’m ALL IN BABY!” point, the volume steadily increases, spiking as the price spikes, but then continuing to increase as the price collapses, not making a major turn in direction until the BOTTOM is reached from the late-2007 through 2009 decline in March of 2009, at which point trading volumes declines with minor fluctuations, such that trading volumes today are pretty close to where they were at the bottom in 2003.
For data to have a sliver of a chance to be interpreted (guessed at) reasonably, there needs to be an accompanying narrative that encompasses ALL of the data, not just the shiny spots that attract the attention of the gibbering masses.
What does the behavior of the trading volume mean, and how is it connected to price movements? One would expect to see trading volumes generally rise with the growth in the underlying economy.
Several stories spring to mind:
1) the volume data is meaningless, due to unreported dark pool trading
2) until volume begins to soar as well, indicating a drawing back into the markets of those who were scared away for a generation (or two), we are nowhere near a peak.
3) the character of the NASDAQ has changed over the intervening quarter century, and is a lot less like a penny stock market today, with (unproven assertion) the average NASDAQ market cap being significantly larger and more stable (larger = more stable? another unproven assertion, LEH & AIG beg to differ), with greater stability implying less jittery trading (yet ANOTHER unproven assertion)
4) if we factor in the average PE of the NASDAQ, things look a whole lot more rationally valued (not necessarily rational, but MORE rational) today than they were in 2000 … perhaps the current peak will pop closer to 10,000 than 5,000
5) the whole chart is intended as nothing more than fodder for humor, not to be taken seriously, except for the hint of narratives that might accompany each of the funny annotations