Are Stocks 80% Overvalued?

What do you think? Are all the stock market holders in for a 50% drop? I was just reading an article and I was wondering. Unfortunately I don't have deep enough pockets to have funds in the stock market but if the stock market drops significantly my guess is the price of gold will go up. What do you think?

http://thesovereigninvestor.com/exclusives/stocks-economy-on-verge-of-collapse/?z=385647

 

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Lately gold hasn't followed the stock market like it usually does . But if they did fall to 50% it would kill me and I'm sure gold would rise as more people put there money into other assets like PM and real estate .

 

It is my opinion that we're in a correction. Thus, the gold and silver prices may actually drop a little with the market. If it does go into free fall, gold and silver will probably rise in value. My plan is to wait a couple of weeks and probably dump more into the market.

 

There's a lot wrong with the market. Many stocks are overvalued. I happen to have a bunch that are tremendously undervalued, and continue to go down.

TGH, SSW, POT, SFM are a few examples. Others are at sale prices now we'll likely not see again for multiple years. Trouble is, it always takes some guts to charge into the market when everyone else is running out with their hair on fire. Kinda like what it takes to still believe in metals.

I've come to terms with the idea that rational market moves are gone for the time being.

 

80%.....no. 50%.....no. 10-15% probably. Dropped 3-4% yesterday and 10-12% over the last 7-10 days. Looks poised to pick up about 5% right out of the chute today though. With interest rates low, PM's languishing, there's not many other places for people to put their money and look for decent appreciation. The market is what it is for now. Once the interest rates hike up 3-4 notches, we'll see where things go then.

 

A friend of mine who incidentally used to be one of the highest regarded stock brokers around (now retired) had mostly one thing to say. You buy when there is blood flowing in the streets.
And of course the stocks are overvalued, just look at the correlation between the stock market and the money supply.
One should expect the market to rebound, the question is what happens after it rebounds. If you trust in central bankers omnipotence I imagine you believe we're seeing a hiccup, if not you'll likely sell on the rebound and then sit back and eat popcorn as you watch the market burn.
In the end it's a crap shoot...

 

Was he MS13?

Chris

 

Lol, no I don't imagine so.

 

Since this whole thing is not based on intelligence and financial expertise, it tells me there are too many ignorant people in the stock market. It is now based on fear and future success or failures that can't be predicted. Although this is part of the investment process, they are making it their only rational. I hope they bleed enough so they never come back. Then this will purge the unwanted players and the market will come back to normal.

 

80%????? Not even close, P/E looking forward is around 17 for the S&P . The last 15 years it has averaged about 16, and historical average (which includes, recessions, bear markets etc.) is around 13. We are just not that extended. When you consider the 0% interest rate and improving conditions in US, the 17 multiple might even be justified, if not, slightly overvalued at best. Also, companies have a buttload of cash on hand, which can further justify the rich valuation.

EDIT: Oh by the way, the data is a few day old so we very well be trading at a low 16 or even high 15 multiple after the correction.



Mike

 

As the Sage of Omaha says When others are greedy. it is time to be fearful, when others are fearful, it is time to be greedy."

 

Just for you bullion guys, silver and gold are heading south as well. So we all might be in the bread line together. Most of my money is in the bond market so I'm not hurting near as much as others. I think this whole thing might be agitated by the doom sayers. It is kind of like Pavlov's law; Tell people a lie long enough and they will start to believe it. We need to get rid of both the lairs and the fearful to see things get back to normal. I feel the market will eventually recover. Precious metals? I'm not to certain they will do as well. You may have to be in it for far too many years.

 

Ok, but just who are the liars? The dudes that have the MSM in their pockets can't really be trusted, and many of the alternative media are fed nonsense, so who is actually telling the truth?

I believe a big part of this are the HFT's. Those algos grab onto the moves and run. If they're pinged with some info, and it can be false, the can be made to dance like a puppet.

In the end, I think this correction isn't quite over.

 

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It's not so much a question of if the SHTF will come but when. The current system is unsustainable and will come apart one way or another. So, for how long will they be able to kick the can down the road?
Now, having said that... I will gladly agree that some preppers have less probable fears at times.

 

Sorry guys. I can't cancel my unwanted posts or seemed to fix my statement. The software doesn't doesn't allow it. Click on the bottom portion of my previous post to read my statement.

 

What if that time is 1000 years from now???? What if the current system is substainable and just needs maintenance every once in a while????

I really don't think it makes sense to plan your entire financial future around an event that very likley will not occur in your life time.

Mike