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    Are US stocks over-valued?

    With the Dow Jones over 28600 & NASDAQ over 9000, is the US stock market over-valued? Could this be the melt-up before the melt-down?

    Any thoughts / opinions?

    #2
    This is my WAG, completely unscientific gut feeling... But I'd say "yes, somewhat." I'm sort of expecting a downturn sometime in the next year or two, wherein the stock markets fall (whether in a tumble, or simply a slow decline) to the tune of 10-15%, before slowly turning around again after a year or two of lower values.

    I don't think it's hugely inflated, because no one sector is sizzling hot. I think it's simply the economy has grown relatively unbounded lately, and folks are starting to get a little over-confident. As any number of factors drags on that confidence, the markets will likely let some of the air out.

    But again, that's just me holding a wet finger in the breeze...
    "Praestantia per minutus" ... "Acta non verba"

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      #3
      People have been asking the same question, and giving responses similar to kork's, for several years now. Eventually, they will be right.
      Steve

      * Despite the high cost of living, it remains very popular.
      * Why should I pay for my daughter's education when she already knows everything?
      * There are no shortcuts to anywhere worth going.

      Comment


        #4
        There are so many threads over on bogleheads talking about not investing now and waiting for the dip because the market is at an all time high. The market had 32 all time highs in 2019. If you sat out 2019, you missed the nice 29% gains. Regardless, we do seem to be operating in a normal band. Although that doesn't mean we won't have a 40% correction this year, just that the current market valuation is not out of line with history.

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          #5
          Originally posted by corn18 View Post
          There are so many threads over on bogleheads talking about not investing now and waiting for the dip because the market is at an all time high. The market had 32 all time highs in 2019. If you sat out 2019, you missed the nice 29% gains.
          And there were record highs in 2018 and 2017 and 2016....

          The time to invest is always NOW. Today, tomorrow, next week, next month, and next year. Just keep investing slow and steady no matter what the market is doing. Have an asset allocation that you are comfortable with and lets you sleep at night without worrying what might happen. And don't check your portfolio's value every day. Turn off the cable business news shows.

          That doesn't mean to totally ignore things. You will probably need to rebalance now and then, maybe once a year or so, to keep on track with your AA. But don't sit on the sidelines waiting for the "right" time to invest because I guarantee you'll miss it if it even exists at all. We started investing almost 30 years ago with next to nothing. We opened our first mutual fund account in 1992 with $50. We now have a $1.3 million portfolio. We have never stopped investing. Not a month has gone by in almost 28 years that we haven't added to our investments. You just have to learn to tune out the noise.
          Steve

          * Despite the high cost of living, it remains very popular.
          * Why should I pay for my daughter's education when she already knows everything?
          * There are no shortcuts to anywhere worth going.

          Comment


            #6
            Awesome, Steve!

            Well, the reason I asked is not to stop investing as we've ploughing into the market since 2008. They've grown nicely since then & I don't plan to stop. However, some or the stocks I want (Google, for one, & Intuitive Surgical, for another) have shot up & I was wondering if the market was due for a pull back. The assassination of Qasim Suleiman was - per the Iranians - an act of war & that might mean some pummeling of the markets here, which in turn offers a buying opportunity for small fry like me.

            i understand that no one has a crystal ball but real estate sales in my neck of the woods seem to be cooling & slowing, which is in contrast to the stock market being so hot & getting hotter. I am having a hard time reconciling these two diametrically different moves. The killing of Suleimani might trigger what many fear - a recession.
            Last edited by Scallywag; 01-03-2020, 07:41 PM.

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              #7
              Originally posted by Scallywag View Post
              Awesome, Steve!

              Well, the reason I asked is not to stop investing as we've ploughing into the market since 2008. They've grown nicely since then & I don't plan to stop. However, some or the stocks I want (Google, for one, & Intuitive Surgical, for another) have shot up & I was wondering if the market was due for a pull back. The assassination of Qasim Suleiman was - per the Iranians - an act of war & that might mean some pummeling of the markets here, which in turn offers a buying opportunity for small fry like me.

              i understand that no one has a crystal ball but real estate sales in my neck of the woods seem to be cooling & slowing, which is in contrast to the stock market being so hot & getting hotter. I am having a hard time reconciling these two diametrically different moves. The killing of Suleimani might trigger what many fear - a recession.
              There was suppose to be a double dip recession in 2014, brexit was suppose to trigger 2016 recession, Trump's win was suppose to trigger a recession the entire time he's in office. The trade war was suppose to trigger a recession...out of all the ones here, a war in the middle east is like the last thing that triggers a recession. A war in the Middle East for the U.S is a Tuesday. When are we not in some kind of war in the middle east?

              So here's the thing..we are in uncharted territory. My prediction is recession will become more and more rare. WHY? Automation, globalization, and technology is completely changing how companies make money. And to say them making RECORD PROFITS while using less and less employees. Wages are not growing while measured productivity is? You can thank technology for that. I know too many people point fingers to "corporations are just slave driving their employees!..They deserve a higher wage because just look at the productivity!". One needs to dig deeper into why productivity is higher, and it's higher with LESS employees!

              In my job as a hospital pharmacist, prior to having omnicell/tube stations/electronic records/computers..drugs were hand delivered, secretary and nurses hand deliver orders to the pharmacy, and we fill them there. These orders required the MD to come into the hospital and write them by hand. Today MDs can just enter orders using their cell phones anywhere in the world. Something that would take a normal person 25 minutes to accomplish can today be taken care of in less than 10 seconds! Our hospital increased bed counts and we have LESS pharmacists today while our job is more relaxed than ever before!
              Last edited by Singuy; 01-04-2020, 10:46 AM.

              Comment


                #8
                Originally posted by Singuy View Post


                In my job as a hospital pharmacist, prior to having omnicell/tube stations/electronic records/computers..drugs were hand delivered, secretary and nurses hand deliver orders to the pharmacy, and we fill them there. These orders required the MD to come into the hospital and write them by hand. Today MDs can just enter orders using their cell phones anywhere in the world. Something that would take a normal person 25 minutes to accomplish can today be taken care of in less than 10 seconds! Our hospital increased bed counts and we have LESS pharmacists today while our job is more relaxed than ever before!
                Hey Singguy, you're a pharmacist? How are opportunities in this field? I noticed you said there are fewer pharmacists but is expected to be still lucrative in the next few years or will supply outpace demand? Asking for my daughter who would like to go into the medical field. Thanks!

                Comment


                  #9
                  Originally posted by Scallywag View Post

                  Hey Singguy, you're a pharmacist? How are opportunities in this field? I noticed you said there are fewer pharmacists but is expected to be still lucrative in the next few years or will supply outpace demand? Asking for my daughter who would like to go into the medical field. Thanks!
                  If you were ask me this question 10 years ago, I would say it's okay. Retail sucks but life is much better in a hospital.

                  But this is 10 years later, and today you should have your daughter STAY AWAY at ALL COST. Saturation due to a high amount of schools opening/automation/online dispensing has caused starting salary wages to DECREASE. Many newly graduates are having a really hard time finding a job in well established cities, and some are even getting laid off from places like Missouri (my friend's husband being one of them). Walmart did a massive cut to older pharmacists and pretty much most of retail are scrambling.

                  Reason for this is the recent massive push for online pharmacy dispensing. Notice that Medicare and other private health insurances are pushing pts to go to their insurance owned online pharmacies. They will typically authorize you a one time fill at a local in network pharmacy, and the rest must be ordered online. This kind of practice is crashing retail and has tanked walgreens stock. Retail are clamping down hard, forcing RPHs to give as many flu shots or MTM counseling as possible to make up for the deficit.

                  I honestly see our job for the most part disappear in 10-15 years time. There's really no reason to have pharmacists around. I feel like pharmacists act too much as a clutch for MDs. Without this double check, MDs will be more cautious at what they are doing. Then you add AI into the mix plus barcoding, I see out of all health processions RPHs are the first to go (radiologist being the close second). Many countries doesn't have pharmacists and their life expectancy is not that far behind the U.S. Europeans with universal healthcare pays pharmacist at half the price. This is another major headwind since some kind of medicare for all will eventually be pushed and win. The RPH salary add 311 billion dollars/year to the healthcare cost. While everyone yells at insurance company for pocketing a few billion on the backs of sick people, it doesn't hold a candle if you calculated the cost of RPHs to healthcare.

                  My opinion on the subject has a lot of pushbacks from my colleagues because they think I'm just crazy. I explain to them how much more productivity we are handling while using half the staff but they still think our job is too important to disappear. It's almost like telling coal miners and manufacturing workers that they should start looking for backup plans in the early 1990s. No one wants to listen until it's too late. As you guys can see, I have diversified out of this a long time ago and have reached financial independence way before the apocalypse of my profession.
                  Last edited by Singuy; 01-06-2020, 12:19 PM.

                  Comment


                    #10
                    Originally posted by Singuy View Post
                    There's really no reason to have pharmacists around.
                    Wow Singuy -this makes me really sad. I know jobs change over time--both DH and I had our original career field go away before the end of our careers (just dumb luck that we had already transition to something else), but pharmacist? I really dislike online pharmacies. And, what will online pharmacies do for someone who needs an antibiotic right away, for example?

                    Comment


                      #11
                      Originally posted by Like2Plan View Post

                      Wow Singuy -this makes me really sad. I know jobs change over time--both DH and I had our original career field go away before the end of our careers (just dumb luck that we had already transition to something else), but pharmacist? I really dislike online pharmacies. And, what will online pharmacies do for someone who needs an antibiotic right away, for example?
                      Retail pharmacies will never go away completely because lots and lots of prescriptions need to be filled same day. Heck, every single prescription we write at urgent care falls into that immediate need category. But if the retail pharmacies lose more and more of the maintenance drug business (diabetes, high blood pressure, cholesterol, etc.), that's a big chunk of what they do.
                      Steve

                      * Despite the high cost of living, it remains very popular.
                      * Why should I pay for my daughter's education when she already knows everything?
                      * There are no shortcuts to anywhere worth going.

                      Comment


                        #12
                        Originally posted by Singuy View Post

                        we are in uncharted territory. My prediction is recession will become more and more rare. WHY? Automation, globalization, and technology is completely changing how companies make money. And to say them making RECORD PROFITS while using less and less employees. Wages are not growing while measured productivity is? You can thank technology for that. I know too many people point fingers to "corporations are just slave driving their employees!..They deserve a higher wage because just look at the productivity!". One needs to dig deeper into why productivity is higher, and it's higher with LESS employees!

                        Originally posted by Singuy View Post

                        My prediction is recession will become more and more rare. WHY? Automation, globalization, and technology is completely changing how companies make money. And to say them making RECORD PROFITS while using less and less employees. Wages are not growing while measured productivity is? You can thank technology for that. I know too many people point fingers to "corporations are just slave driving their employees!..They deserve a higher wage because just look at the productivity!". One needs to dig deeper into why productivity is higher, and it's higher with LESS employees!
                        I predict a recession precisely for the reason above. If there is increased productivity due to automation & lower manufacturing costs due to the need to employ fewer people, that means fewer jobs which implies a lesser / decreased spending ability of the population. All that supply will not have enough demand due to reduced consumption. This will lead to rise of manufacturing / production costs due to higher inventory levels & reduced demand.

                        This will actually trigger a great depression type situation, due to not enough jobs and severe reduction of consumer spending due to reduced overall disposable income of the population.

                        Comment


                          #13
                          Originally posted by disneysteve View Post

                          Retail pharmacies will never go away completely because lots and lots of prescriptions need to be filled same day. Heck, every single prescription we write at urgent care falls into that immediate need category. But if the retail pharmacies lose more and more of the maintenance drug business (diabetes, high blood pressure, cholesterol, etc.), that's a big chunk of what they do.
                          All it takes is some Redbox pharmacy dispenser system with wifi Skype counseling screen for the 4 pts that want to talk to a professional will disrupt brick and mortar.

                          Comment


                            #14
                            Originally posted by Scallywag View Post



                            I predict a recession precisely for the reason above. If there is increased productivity due to automation & lower manufacturing costs due to the need to employ fewer people, that means fewer jobs which implies a lesser / decreased spending ability of the population. All that supply will not have enough demand due to reduced consumption. This will lead to rise of manufacturing / production costs due to higher inventory levels & reduced demand.

                            This will actually trigger a great depression type situation, due to not enough jobs and severe reduction of consumer spending due to reduced overall disposable income of the population.
                            Automation make goods cheaper with no inflation risk. But what you are saying can happen over time.

                            The great depressions greatest problem was run away inflation.

                            Comment


                              #15
                              Originally posted by Singuy View Post

                              All it takes is some Redbox pharmacy dispenser system with wifi Skype counseling screen for the 4 pts that want to talk to a professional will disrupt brick and mortar.
                              Good point. And now that I think about it, some Urgent Cares actually dispense meds onsite. Ours has talked about it but decided not to for whatever reason. 95% of my prescriptions are probably for 10 meds.
                              Steve

                              * Despite the high cost of living, it remains very popular.
                              * Why should I pay for my daughter's education when she already knows everything?
                              * There are no shortcuts to anywhere worth going.

                              Comment

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