Monday , July 6 2020
Home / Mish's Global Economic / Are You Overpaying for Stocks?

Are You Overpaying for Stocks?

Summary:
Lance Roberts, Chief Strategist at RIA Advisors has the "Tweet of the Day" Too Fast, Too FuriousBuy the Unknown the Unwanted, the UnlovedSmall Cap Valuations Through the RoofAgree with Bianco on that.Marijuana Legalization Coming?My answer: Yes, if Biden wins, and perhaps anyway.China-US Trade SouringReflections on LiquidityPent-Up Spending ComingFor how long no one knows, and that is what matters. I suspect something like a W- or square-root-shaped recovery with weak uptrends following that deep second-quarter decline.Grim Economic DataMay 8: Over 20 Million Jobs Lost As Unemployment Rises Most In HistoryMay 15: Retail Sales Plunge Way More Than ExpectedMay 15: Industrial Production Declines Most in 101 YearsMay 30: GDPNow Forecast is Negative 51.2 PercentJune 3: Bad Economic Reports?

Topics:
Mike Shedlock considers the following as important:

This could be interesting, too:

Mike Shedlock writes There is No Recovery in the Aerospace Industry

Mike Shedlock writes All In, All Out, Why Not?

Mike Shedlock writes Worrisome Covid Mutation Is More Contagious

Mike Shedlock writes Trump Extends Payroll Protection Program Another Five Weeks

Lance Roberts, Chief Strategist at RIA Advisors has the "Tweet of the Day" 

Too Fast, Too Furious

Buy the Unknown the Unwanted, the Unloved

Small Cap Valuations Through the Roof

Agree with Bianco on that.

Marijuana Legalization Coming?

My answer: Yes, if Biden wins, and perhaps anyway.

China-US Trade Souring

Reflections on Liquidity

Pent-Up Spending Coming

For how long no one knows, and that is what matters. 

I suspect something like a W- or square-root-shaped recovery with weak uptrends following that deep second-quarter decline.

Grim Economic Data

  1. May 8: Over 20 Million Jobs Lost As Unemployment Rises Most In History
  2. May 15: Retail Sales Plunge Way More Than Expected
  3. May 15: Industrial Production Declines Most in 101 Years
  4. May 30: GDPNow Forecast is Negative 51.2 Percent
  5. June 3: Bad Economic Reports? Yes, But They Were Supposed to Be Bad

Ripple Impacts

For a detailed synopsis of the state of the economy and the ripple impacts, please see The Economy Will Not Soon Return to Normal: Here's Why.

Global COVID-19 Risk Ranges Up to $82 Trillion

To understand the total global risk, please see Global COVID-19 Risk Ranges Up to $82 Trillion

GDP Projections Before and After Covid-19

Are You Overpaying for Stocks?

I added that red line and expect a shape something like that. 

Why?

In addition to depleted savings and an expected huge change in attitudes on risk, presidents prefer to have a recession or weakness in the first two years of their term, not their 4th year.

The US is in recession now. After a weak rebound, it is not at all far-fetched to believe there could be another shorter double-dip coming.

Regardless, I believe the CBO projections in the above chart are optimistic for the reasons stated. 

For discussion, please see CBO Estimates it will Take 10 Years Just to Get Back to Even.

Mish

Mike Shedlock
Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Leave a Reply

Your email address will not be published. Required fields are marked *