I’ve seen a lot of bubbles in my time and I have studied even more in history, so I know what I mean by a bubble and I systemized it into a “bubble indicator” that I monitor to help give me perspective on each market. We now use it to look at most markets we are in. I want to show you how it works and what it is now showing for US stocks.
Each of these six influences is measured using a number of stats that are combined into gauges. In the stock market we do it for each stock that we are looking at. These gauges are combined into aggregate indices by security and then for the market as a whole. The table below shows the current readings of each of these gauges for the US equity market as a whole, and the chart below it shows the aggregate reading derived by combining these gauges into one reading for the stock market going back to 1910. It shows how the conditions stack up today for US equities in relation to past times. Read more…..
Chart of the Day
In the face of economic uncertainty and a new Biden presidency, billionaire hedge fund manager and philanthropist Ray Dalio joins Washington Post columnist David Ignatius to discuss the massive gaps in wealth, value and politics. Dalio addresses what Biden can do to restore U.S.