[A_D_E_P_T]

The stock market has stopped making sense since the 2008 financial meltdown. Many reasons for this. In part, ZIRP is to blame -- a ton of money flowed into stocks simply because they were the only way to tread water and get a return. In part, you can blame Bitcoin (which demonstrated at scale that you can have an "asset" with zero underlying value and net-negative social utility that still functions as an appreciating value token,) and the meme-stock.

The stock market is basically detached from the industrial manufacturing/production economy -- and even to some extent the services/insurance economy -- and is now vibes/feels based.

[OgsyedIE]

Regardless of individual stock performance, present-day total stock market liquidity is a proxy for expectations of future total stock market liquidity.

If people are keeping their money in the market (regardless of allocation inside the market) they are expecting that any other asset class will perform worse in the near future. If they expect that commodities are too volatile, spending won't pay off, monies and bonds will inflate away and land may face legal risks from populist, technocratic or extrajudiciary changes to the legal system then their least worst options are to go all in on stocks. Furthermore, the energy sector is going to have a windfall from filling up the VLCCs of the world and look for anywhere to dump the cash that helps escape taxes, driving future liquidity expectations even higher.

[A_D_E_P_T]

Right, and "monies and bonds will inflate away" is related to what I said re ZIRPs -- you can't expect a decent return by parking your money with the bank, either, as interest rates are low to nonexistent. The stock market's the only good option. This was no accident, it was an intentional policy move... And now, "the DOW's over 50,000!"

What's even more troubling is that there was once the pretense that valuations had something to do with fundamentals, but this has gone entirely out the window since about 2013.

So basically none of it makes any sense and you've just got to ride the tiger.

[verteu]

Yeah, stock valuations seem pretty high, eg: https://www.multpl.com/shiller-pe , https://www.currentmarketvaluation.com/models/buffett-indica... , https://www.multpl.com/s-p-500-earnings-yield

[redwood]

Thanks the second chart is more concerning than the first. The first has a variety of potential distortions at play first of all portion of industrial activity that's done by public vs private companies shifts over time and second of all a lot of these companies do 40 to 50% of their business overseas.

Whereas a historically low ratio of earnings to index value is a deeper concern to me

[brewdad]

I’ve never looked at the numbers to see exactly how large of a pool it is but millions of Americans are effectively forced to buy into the market to fund our 401ks and future retirements. That’s billions of dollars of inflow every month that has to go somewhere, usually index funds.

[bdangubic]

it is exactly this. I am self-employed and have been managing my solo 401k for 15+ years now. while I am fully aware of market being overvalued I will still max out my 401k this year ($80k, I am over 50 :) ) and that money needs to go somewhere. I could theoretically sell and sit on the cash and wait on "crash" but I could have technically done that a year ago (this were similarly not very rosy) or even earlier and that obviously would have been a terrible financial decision. no one can time the market and therein lies the core issue, money will always be flowing in...