tag:blogger.com,1999:blog-5389144729834496735.post1432456360156237420..comments2024-03-17T05:15:55.634-04:00Comments on The Brooklyn Investor: Scary Chart Part IIUnknownnoreply@blogger.comBlogger4125tag:blogger.com,1999:blog-5389144729834496735.post-19016414295332380282016-08-15T15:33:46.001-04:002016-08-15T15:33:46.001-04:00I spent 30+ years starting and running retail mort...I spent 30+ years starting and running retail mortgage banks in my "first" career. We just wrote about this very same issue and argument in our quarterly letter as it pertains to real estate. IMHO, much of the woes in retail are related to the fact that many people were living a lifestyle they could only afford by continuously refinancing homes and paying off credit cards. You would have thought that all ended with the financial crisis, but not so much for those who had not burned thru their equity or lost a job. This time around in the last financial crisis, people let their homes go but not their credit cards...Think about that.<br />Anyway, my main point is that so much of the economy- from housing, to retail, to expensive family smart phone plans- has been fueled by consumer debt that we have taken it for granted. The recovery in real estate prices has definitely been driven by ZIRP.<br /> If wages have been stagnant for so long, how can the middle class afford such higher health care costs, $275 cell phone plans, etc.? Obviously, many have not been able to afford all of the above and this may be why we have such a slow recovery. I would bet that many who have been playing the 'over spend my income' game will not be doing so as much going fwd.<br /><br /> Peterhttps://www.blogger.com/profile/16778844113639386983noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-90148161122315514992016-08-12T08:50:49.916-04:002016-08-12T08:50:49.916-04:00Hi,
I don't really pay much attention to how ...Hi, <br />I don't really pay much attention to how the media is trending. I am more interested in specific arguments, rationale etc... I have no idea about retail sentiment about interest rates. <br /><br />However, it does seem like people still like bonds more than stocks. There as an article this morning somewhere that said equity funds have been having net outflows and bond funds are still getting a lot of inflow. <br /><br />From what I read, it seems more like the younger generation is not at all interested in stocks. <br /><br />Anyway, maybe that makes sense; maybe that's why bonds are way more overvalued than stocks; people have been selling stocks and buying bonds. <br /><br />kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-3746755072704896152016-08-11T22:17:40.273-04:002016-08-11T22:17:40.273-04:00Thanks for the follow-up article! Looking forward ...Thanks for the follow-up article! Looking forward to reading both Money Masters books. <br /><br />On the valuations of stocks, it feels like the thing that is driving recent increases in P/E is that the masses are becoming more accustomed to the ideas that 1) the entire world is getting older, 2) aging puts negative pressure on interest rates, 3) interest rates will be low for a long time, and 4) stocks should be valued with earnings yields at a slight premium to 10 year Treasury yields (as discussed in your last post). It feels like there is room to run on these ideas reaching mass adoption, i.e., a fundamental change in how regular people value stocks. If SPX P/E ratios ever hit 30x, it will be a heck of a lot easier to reduce allocation to stocks, but I feel like the probability of a big move up is quite a bit higher than zero given how public opinion on these topics is evolving. <br /><br />I see more and more articles supporting these premises every day, e.g., http://www.bloomberg.com/news/articles/2016-08-11/more-old-than-young-a-population-plague-spreads-around-the-globe and http://www.wsj.com/articles/stocks-hit-new-highs-and-that-could-be-just-the-start-1470954978.<br /><br />I know this isn't scientific. And obviously a crash could come at anytime. And indebtedness is scary. But this is how things seem to be trending in the media. Would be curious about your thoughts kk. <br /><br />Is there any good way of measuring retail investor sentiment about interest rate expecations? Not Wall Street expectations, but like surveying the same 1,000 retail investors every month? Brianhttps://www.blogger.com/profile/17956046583768311736noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-12836926852664882222016-08-11T10:16:44.671-04:002016-08-11T10:16:44.671-04:00Great article. We wrote about this topic with some...Great article. We wrote about this topic with some additional data that you might find interesting. http://www.valuepenguin.sg/state-global-stock-markets<br />Consumer debt is back at its peak, and S&P 500 is the most expensive index in the world for the first time in more than a decade. Some kind of capital flight might be happening into the country, not unlike what happened after Asian crisis leading up to 2001.Duck Juhttps://www.blogger.com/profile/00561437993303138735noreply@blogger.com