Even the biggest, most perfectly formed financial bubble… bursts eventually. The pressure of outside forces— or a sudden, unexpected pin prick can wipe out years of impressive Stock profits in just a matter of days.
Bubble Bursting Event of Epic Proportions
The huge, unexpected, lingering, Covid 19 virus pandemic continues to dominate the world economy pressuring down corporate sales, profits… and eventually Stock prices.
As I write this on 9/11, we are all reminded of how fragile America can be. Nowhere is this more graphical than in U.S. Stocks. Never is a Stock more vulnerable and carry more risk than when it’s near all-time highs.
Unbridled Enthusiasm… Again!
It was Federal Reserve Chairman Alan Greenspan that unleashed the phrase “unbridled enthusiasm” back in 1996 commenting four years before the Stock Crash we now call the Dot Com Bust.
The Stock Market volatility in Summer 2020 has been wild and crazy! This week was a wild ride. The NASDAQ entered correction territory and then rebounded. Driven by uncertainties on a scale I never imagined, investors are in a historic quandary.
“Greed and fear of missing out” VERSUS “sell and take your profits.“
There’s no better chart we’ve ever found than this one to understand if Stocks are a buy, they’re overvalued, or in a bubble.
Owning S&P 500 right now is not the riskiest time in history, but the facts are clear— Stocks are in an EXTREME BUBBLE.
Check the P/E ratio on Stocks you own. Keep a close eye on anything trading over 25 times earnings.
Investors tend to get very nervous as we approach October, the time frame of past bubbles bursting. With both the elections and Covid out there as the great unknowns, Stocks could keep going up or flash crash 25%.
