The most dangerous time since the Civil War

[David Horn]

(01-16-2018, 09:55 AM)Kinser79 Wrote:

(01-15-2018, 05:47 PM)David Horn Wrote: Inflation of roughly 2% doesn't preclude capital formation, or we wouldn't be awash in capital today.  It does incentivize spending, which is the lifeblood of every economy.

So you are saying that the stock market isn't currently over valued?  If so that doesn't explain your bearish posts elsewhere.

The stock market has almost nothing to do with capital formation, with the rare exception of IPOs.  Instead, look at the amounts carried forward on balance sheets or stock buybacks, if stock is your thing.  Or just look at one or two companies.  Apple has so much cash stashed overseas that it's running out of places to put it.  Amazon, on the other hand, is just buying everything in sight  So is Berkshire-Hathaway.

But yes, the stock market is overpriced.  Stocks are based on economic activity: P/E ratios typically.  With so much of the worlds wealth being bottled-up by the few, P/Es are on the rise.