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Old 19.03.2017, 22:19
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Is the US stock market in a bubble

if so, what's going to pop it?
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Old 19.03.2017, 23:07
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Re: Is the US stock market in a bubble

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if so, what's going to pop it?
A pin ?
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Old 19.03.2017, 23:14
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Re: Is the US stock market in a bubble

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A pin ?
You mean a prick.
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Old 19.03.2017, 23:33
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Re: Is the US stock market in a bubble

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if so, what's going to pop it?
At some point in the future. Stocks & Shares are starting to be a theme on EF so we are entering the final phase. Of course the market could easily rise 50-100% from here before it bursts. Reminds me of early 1987 TBH.
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Old 20.03.2017, 09:24
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Re: Is the US stock market in a bubble

Seems like we are somewhere in the Mania/Enthusiasm phase, but the question is how close to the pop.

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Old 20.03.2017, 09:48
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Re: Is the US stock market in a bubble

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Seems like we are somewhere in the Mania/Enthusiasm phase, but the question is how close to the pop.

The UK housing market is in denial at the moment.
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Old 20.03.2017, 09:49
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Re: Is the US stock market in a bubble

Which bit of the stock market?

As in previous bubbles, tech stocks are high, and some other sectors, while the bedrock consumer staples, industrials, healthcare providers, and anything with significant physical inventory is comparatively un-bubbly.

Take a look at dividend yield as an inverse bubbliness indicator - any company paying a good dividend (say 4%+) is probably reasonably priced.
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Old 20.03.2017, 11:38
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Re: Is the US stock market in a bubble

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You mean a prick.

Who do you mean, Donald Trumpo ?
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Old 20.03.2017, 11:44
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Re: Is the US stock market in a bubble

Which metric(s) are you looking at?

We'll see after FED starts to shrink their balance sheet.

TBH I believe stocks are on the high side but that doesn't mean they won't go even higher before blowing up.
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Old 20.03.2017, 12:18
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Re: Is the US stock market in a bubble

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Who do you mean, Donald Trumpo ?
How can you possibly confuse me with Donald Trump? The vast majority of my posts are more than 140 characters.
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Old 20.03.2017, 12:58
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Re: Is the US stock market in a bubble

Even with impending tightening, there's a lot of cash sloshing around at the moment looking for returns.

The cryptocoin markets have been going crazy with some coins (e.g. Ethereum which now has a 4 billion USD market cap) rising four-fold over the last few weeks.

http://coinmarketcap.com/
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Old 20.03.2017, 16:38
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Re: Is the US stock market in a bubble

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Even with impending tightening, there's a lot of cash sloshing around at the moment looking for returns.

The cryptocoin markets have been going crazy with some coins (e.g. Ethereum which now has a 4 billion USD market cap) rising four-fold over the last few weeks.

http://coinmarketcap.com/
Recently, I've been looking closely at Ethereum's technology. At the same time, I've also found out there is quite a nice crypto industry developing in Zug. There's probably a lot more to lock into there as well.

Any chance you've bought in to ETH?
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Old 20.03.2017, 17:00
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Re: Is the US stock market in a bubble

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Recently, I've been looking closely at Ethereum's technology. At the same time, I've also found out there is quite a nice crypto industry developing in Zug. There's probably a lot more to lock into there as well.

Any chance you've bought in to ETH?
Zug is where the Ethereum Foundation (main developers) is located. Vitalik Buterin, the Russian-Canadian boy-genius who is the originator and primary driver of the coin lives there too.

I've been into ETH for a long time (there's probably an old post here from me where I suggest it as something to keep an eye on). I wouldn't necessarily advise buying into it at the current time (especially if you're looking for short-term gains) since it's had the sort of rise over the past few weeks that is almost inevitably followed by a correction, but I think long-term its value will be higher given the functionality of this coin, the intense interest from the fintech industry, and its ability to act as the 'machine code' of an overlying asset.

I like to compare it to a unicorn startup; it has a current valuation of 4B USD, but in a world where SnapChat is valued at 20B USD, I could see Ethereum rising to 50-100B USD. (As a comparison, Bitcoin is close to 20B USD and Ethereum's technology is much more advanced.)
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Old 21.03.2017, 14:58
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Re: Is the US stock market in a bubble

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Even with impending tightening, there's a lot of cash sloshing around at the moment looking for returns.

The cryptocoin markets have been going crazy with some coins (e.g. Ethereum which now has a 4 billion USD market cap) rising four-fold over the last few weeks.

http://coinmarketcap.com/
I've been looking over your link. Are all of those listings legitimate, if still very young, crypto currencies?? I had no idea there were so many. Now I'm even more intrigued.

I did a quick look for something along the lines of a crypto currency index fund, but didn't see anything listed on US exchanges.

I'll have to do some additional reading. Thanks.
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Old 21.03.2017, 15:58
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Re: Is the US stock market in a bubble

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I've been looking over your link. Are all of those listings legitimate, if still very young, crypto currencies?? I had no idea there were so many. Now I'm even more intrigued.
There are hundreds of cryptocoins; some new, some nearly as old as bitcoin. The vast majority are low market cap and somewhat similar to penny stocks. They may be subjected to the odd pump-and-dump, but if you don't have automated trading you won't catch that and will be stuck in a liquidity trap even if you do buy on the upsurge.

There are always new coins being produced, and if you catch one on its initial offering and it's got a buzz about it then you can see a nice rise on your investment; but you need to be heavily in the scene (on all the forums) to have knowledge of these.

Something like the top 20 coins in that list are more 'conventional' investments, but even there the volatility can be very high.

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I did a quick look for something along the lines of a crypto currency index fund, but didn't see anything listed on US exchanges.
Funny you should say that. There was a proposal for a bitcoin-backed ETF that the SEC had been musing on for a couple of years (this was from the Winklevoss twins, the guys who sued Zuckerberg over Facebook). This was denied just over a week ago and may have been the reason for the surge in the other cryptocoins since a lot of cash was waiting on the sidelines to pour into bitcoin in case of a yes decision. (Bitcoin suffered a 20% flash crash after the decision but has since clawed back a good bit of that.)

The denial was actually obvious to anyone who thought about it, since bitcoin (and the other cryptocoins) are traded in totally unregulated markets which are subject to the sort of spoofing that was forbidden in the Dodd-Frank act. (They're basically a wild west of trading bots and some of us like it just like that.) There are other ETF proposals pending (an Ethereum one too), but it's hard to see how these would pass either.

Trading bots aside, there's still room for manual investment in these coins; just buy some amount and hold. This has been a good strategy for any of the high market cap coins in that list since cryptocoins are still in the very early stage and look to get much bigger (kind of like the internet in the 90s).
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Old 21.03.2017, 16:02
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Re: Is the US stock market in a bubble

Ethereum is an interesting (counter) example (IMO) for crypto currencies.

They got hacked due to a weakness in the implementation, and a bunch of people lost their money.

Google "Ethereum split" for more info.

Nobody actually backs it or writes "I promise to pay the bearer..." on a Bitcoin - you take your chances on ever being able to cash it in, which is why they're volatile like a penny stock.
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Old 21.03.2017, 16:49
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Re: Is the US stock market in a bubble

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Ethereum is an interesting (counter) example (IMO) for crypto currencies.

They got hacked due to a weakness in the implementation, and a bunch of people lost their money.

Google "Ethereum split" for more info.
Ethereum had a big price crash after the DAO hack and was very profitable if you were quick shorting it, but the price has recovered to a way higher level now; so if you just held, you were fine.

As to the DAO hack itself: basically this was an asset built on top of Ethereum and you could buy DAO tokens with ETH. Because of a failure of the DAO programmer to account for the kind of atomic transactions we take for granted in conventional database programming (and to be fair, Ethereum's programming language didn't make this obvious), a hacker was able to drain a large amount of ETH (about 3.6 million - a third of the DAO's assets) into his own account.

This was solved by the developers issuing a 'hardfork' which is basically a new client which rolled-back the hacker's transactions and repaid the ETH. You can only do a hardfork if you have consensus of the users (and particularly the miners) - almost everybody has to run the new client for it to work. This was (slightly) controversial at the time since people consider that a fundamental property of cryptocoins are that the historical database is immutable, but another fundamental property is that they work by consensus and this won out.

Because of the resistance to the hardfork, the 'original' fork (with the stolen DAO funds) stayed alive (it was expected it would die) because some people kept mining it (I actually did because I'm kinda old school in crypto - and it was quite profitable for a bit). it became known as 'Ethereum Classic' - ETC.

Anybody who had ETH on the new chain also had the same amount of ETC on the old chain so the value split between the two chains (and ETC grew to as much as a third of the value of ETH). This has now settled down and ETC is worth 1/20th of ETH and is a fairly well-respected coin in its own right with a new set of developers and a roadmap that's quite different from Ethereum.

Looking back, this has actually been a success for Ethereum because it was able to overcome a major problem and showed the value of consensus. Everybody is aware of the transaction issue which caused it and there are better tools and procedures now (you still have to be very careful writing Ethereum code, but you should be in any kind of financial programming).

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Nobody actually backs it or writes "I promise to pay the bearer..." on a Bitcoin - you take your chances on ever being able to cash it in, which is why they're volatile like a penny stock.
Company stocks can go to zero too if the management screws up or they have some kind of systemic problem. I'd say cryptocoins are a bit more robust in this regard (if the code has been well tested). If you just treat cryptocoins like shares in your average risky startup (some die, some become Facebook), you should be ok.
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Old 21.03.2017, 17:00
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Re: Is the US stock market in a bubble

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Company stocks can go to zero too if the management screws up or they have some kind of systemic problem. I'd say cryptocoins are a bit more robust in this regard (if the code has been well tested). If you just treat cryptocoins like shares in your average risky startup (some die, some become Facebook), you should be ok.
Except many companies have a real physical underlying value (e.g. in real estate, patents, stock), and all listed ones are audited etc so investers have a reasonable chance of spotting issues. Plus the relatively open nature of them reduces the change of huge swings.

Cryptocoins typically have no physical value and no auditing, so their value is purely due to market perception and can change extremely quickly.
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Old 21.03.2017, 17:14
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Re: Is the US stock market in a bubble

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There are hundreds of cryptocoins; some new, some nearly as old as bitcoin. The vast majority are low market cap and somewhat similar to penny stocks.
When I got to about #50 on the coin cap site list and saw the valuations/prices, that is what occurred to me, but it made no sense. For me, the idea of an initial coin offering (ICO - just learned that today) was something I'd completely missed. I'd always thought of Bitcoin only as a currency and only considered it in alt-FX sort of way.

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Funny you should say that. There was a proposal for a bitcoin-backed ETF that the SEC had been musing on for a couple of years...This was denied just over a week ago and may have been the reason for the surge in the other cryptocoins since a lot of cash was waiting on the sidelines to pour into bitcoin in case of a yes decision.
This news is something else I encountered today. With the ICO idea now fresh in mind, the denial did seem obvious. My perspective was that a Bitcoin ETF would validate and legitimize the tools that could ultimately undermine, maybe even replace?, large amounts of the existing investment (and profit) infrastructure and do so on a global scale.

There seems to be potential for huge upside here with some of these blockchain companies. I even thought about going down to Zug for an afternoon just to walk around and check out the buildings/office space, get some ideas. Plus, I've never been there.

Perhaps legitimizing a matured crowdfunding model might even start draining the US stock bubble. (I felt the need to somehow tie this to the original topic in case it goes completely off the rails.)
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Old 21.03.2017, 17:17
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Re: Is the US stock market in a bubble

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Except many companies have a real physical underlying value (e.g. in real estate, patents, stock), and all listed ones are audited etc so investers have a reasonable chance of spotting issues. Plus the relatively open nature of them reduces the change of huge swings.

Cryptocoins typically have no physical value and no auditing, so their value is purely due to market perception and can change extremely quickly.
Well, this is something I've argued to death on some of the old bitcoin threads here. The value of a cryptocoin is in the mining hardware which secures it (this is billions in the case of something like bitcoin), the value of its functionality (in the case of bitcoin, this is easy transfer of value) and the network effect of its user base (just like your average how-the-hell-can-we-monetize-all-these-users startup).

The fact is that there is a huge interest in blockchain technology because it solves a lot of problems in how to create a public financial system (actually it solves one - the Byzantine Generals' Problem - but this is a great problem to have solved). Whatever happens to any individual cryptocoin, this technology is only going to be more widespread and we're in the early days of this at the moment.
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