Stocks May See ‘Modest Pullback’ On ‘Extremely Stretched’ Positioning, Goldman Says
"Since the start of November, US equity mutual funds and ETFs have witnessed $52 billion of inflows, the largest inflows relative to assets during any five-week period since March 2017," Goldman's Arjun Menon and David Kostin wrote, in a note dated earlier this week.
The debate over whether equity sentiment and positioning has reached extremes sometimes amounts to people talking past each other. That's due to differences in the construction of sentiment indicators, the inherently imprecise natu
I am going with Ray Dalio’s view, which is that relative to bonds, equities are “cheap”. He referenced that with interest rates where they are, bonds are trading at 75 times earnings and “there’s no good reason that stocks couldn’t trade at 50x earnings”.
😂😂
That’s the narrative that is carrying us higher.
I find it hard to buy into because … would you buy a small business, say an ice cream shop, at 50 times earning? There once was a time when investors thought about such parallels. Not anymore.
So I learned to focus on flows pretty much exclusively.
In that regard, I’m wondering if a Biden administration will resurrect the push to make buy-backs less attractive. I haven’t seen even one talking head countenance that possibility. It’s not far-fetched – there were quite a few Republicans in DC in favor of doing something as well. It could be bi-partisan!
But, that’s an issue for next year.
Having owned an active business (a rental property) and passive investments (us equities), I would definitely demand a much higher return for an active business for many reasons- not just because it is a lot of work/worry to own an active business but because you can’t buy in/sell out at the flick of a keystroke.
The USA, if we do a good job navigating the domestic and global economies, can solidify its “investor” status.