So the FTSE decided to bounce back a bit:
But the Dow Jones was not so sure:
I'm not sure the Fat Lady has sung as yet.
Many commentators now seem to agree stock markets are heavily over valued. If the correction is not now it is coming.
But still people buy. If ever proof of irrationality was required, or alternatively that there persists a belief amongst many that they can beat the market, this looks like it.
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In the world of finance the ladies who eat well do not sing. They scream, howl, wail or moan.
“In the world of finance the ladies who eat well do not sing. They scream, howl, wail or moan.”
Demetrius, I can’t tell from the tone of your comment whether this a complaint, or if you are merely bragging. 🙂
Lovely quote from Tim Price the other day:
Some people call it confidence. I call it amnesia.
People are buying crypto again too, and I imagine for the same reason; when prices get low enough, it’s worth a punt. Win and you win potentially very big, lose, and you’ve lost little.
Hello Richard,
I’m a great reader of your blog and you are right about so much.
I think it’s time to strike back against the capitalists and use their tools against them so given you are saying the stock market will crash, I’m going to mortgage the house and short some stocks to get back at them. The guaranteed profits to good causes.
When do you think the crash will be so I can strike with the greatest impact?
I have no idea
And I hope you are joking
What I actually suspect is that you are trolling
Kind of Follow a pattern Richard: Hugh-Jarce; Guy-Leeble; Mike Hunt etc etc.
You’re clearly being trolled by Bart Simpson 🙂
“I’m going to mortgage the house and short some stocks to get back at them.”
I don’t think I’d do that, Guy. You’d be better waiting patiently for the crash then buy in at bargain basement prices.
If you’ve still got any equity in the house by then. 🙂
Guy Leeble –
You can’t use capitalists’ tools against them. Capitalism is a game played by capitalists with capital and people as the pieces.
You ARE one of their tools.
He is definitely a tool.
“But still people buy. ”
Here are some thoughts on my sample size of one…
My main investment is my pension scheme. It has a choice of about 10 funds (the standard asset classes and locations), I can move money without charge but I have to send a letter. Contributions are paid and invested automatically every month. I won’t retire in the next 10 years.
So issues here are: inertia; delay in investment decision being actioned; would want stability to move funds; cash fund is flat; already moved about 25% in to the cash fund; I am not a fund manager.
So to extrapolate (without evidence) –
1) inertia (people will sit on their hands unless panicked into action etc) so when direct debits are set up they will continue,
2) people want a return so are adverse to cash funds
3) but there is already a lot of funds stored in cash (this might be waiting for investment opportunities), this might be providing a floor to the market
4) (I’m not a fund manager) people are being asked to make investment decisions but lack expertise! What could possibly go wrong?
Ken
The thing is rigged to favour the managers
Richard
The problem for retail investors is that they have nowhere else to put their pension cash and so will inevitably leave it where it is. Fund managers will take their profits which will drive down prices. Retail investors will not necessarily continue buying but by not purchasing prices may continue to drop and eventually retail investors could get spooked and dump their stocks allowing the Fund Managers to buy back in at lower prices at the expense of the self managed pension investor. The real danger of big crashes is when investors buy in at margin using borrowed cash. I am not sure if this is the case on this occasion.
I agree re retail investors
This is a structural fault that guarantees failure
It is why I argued for People’s Pensions in 2003: loo it up. It was the precursor of People’s Quantitative Easing
I think there is marginal investment with borrowing now