The thing that amazes me is we have central banks telling us things are going to get a whole lot worse, we have Governments telling us things are going to get a whole lot worse and every reputable economist and government agency telling us things are going to get a whole lot worse. Yet every morning I wake up and read a new straw bulls are grasping at hoping (after the last straw failed), that everyone is wrong.
It isn't rocket science, interest rates take time to filter thru the system. The small rises we have seen which are tiny so far haven't even hit the system fully yet and we are already seeing bankruptcies, big layoffs and consumer spending falling. What is going to happen when they not only fully hit the system, but are raised another 200 - 300 percent? And that's how high they are going.
I keep hearing that stocks are way too cheap look at the P/E's on some companies, we are over sold we must bounce. Well something the bulls love to say is markets are forward looking. Stocks are not too low they have just begun adjusting to the new economic conditions which from here are only going to get worse (according to everyone who is in charge of making sure they do).
So if we have our global recession which hate to say we need after the excess of governments during the pandemic and lets not forget the never before seen debt I have to get a new calculator to even be able to add the numbers in for, where will valuations be then? I can't see how when already companies are downgrading their forward earning forecasts (and its only just begun) that shares are cheap?
Not to mention the support for markets over the last decade or so was just pulled by central banks, who are actually now selling or about to their balance sheets which won't be helping either. And before I forget housing hasn't even dropped yet? Who really thinks housing isn't in a giant bubble and about to pop anytime soon? Interest rates affect housing more than any other factor.
So why would anyone think this is the time to go all in on stocks? Now I might be wrong happy to admit that but the risk is there and ATM I think they saying a better than 50 percent chance of global recession? So from my point of view wrong or right where is the good risk reward in that? Nope, like a lot of the big boys having being saying no point being in stocks ATM. Easy to jump on not so getting out.
In other words wait for the real bottom is how I read that. Which might not be for a few months yet depending on how bad things get. BTW I am sorry to sound so doom and gloom but after reading some of the posts lately I think some doom and gloom is needed. From what I am reading lately everything is fine we are forward looking, so the recession is done, peace in Europe has begun and central banks are now reducing interest rates.
P.S. Apologies for some of the tongue and cheek but had to say something lol. Good luck to all.
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