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Oct 25 • 11 tweets • 4 min read
Valuations are now more expensive than even 1929
This is a MAJOR warning sign for long-term investors
A thread 🧵 2/ The price of pretty much everything in the economy generally goes up over the long run
A home that cost $12,000 in 1960 now costs $400,000
The cost of a loaf of bread went from $0.2 in 1963 to around $2.2 today
Oct 25 • 8 tweets • 3 min read
Yields have just spiked aggressively
Last few spikes led to market corrections
Is this time different?
A thread 🧵 2/ In previous corrections (April 2024, Oct 2023, Aug 2022), rising government bond yields caused the pullback
Today, we’re seeing the same setup again
The 10-year Treasury yield is climbing rapidly
Oct 23 • 13 tweets • 4 min read
The Sahm Rule has been triggered
It's predicted the last 9 recessions
With 0 false signals since 1960
This won’t end well
A thread 🧵 2/ 2007 → Unemployment rate rose by 0.5% in the 6 months leading up to the 2008 Financial Crisis
The unemployment rate also rose 0.5% in the 6 months before the 2001 recession
Oct 23 • 13 tweets • 4 min read
Profit margins have 2x since the 1980s
But valuations have 4x during this period
This is NOT sustainable
A thread 🧵 2/ The market has reached quite expensive valuations
The Shiller price-to-earnings (P/E) ratio gives us a clearer picture this
It compares the S&P 500 to earnings
And provides a measure of the stock market’s expensiveness
Oct 22 • 25 tweets • 8 min read
S&P 500 has surged +40% in just 1 year
This also happened before the 1929 and 2000 crash
Is history about to repeat?
A thread 🧵 2/ Lately, the term “stock market melt-up” has been popping up more frequently in news
Some are getting excited, while others are warning that this could lead to disaster
Oct 22 • 12 tweets • 4 min read
This is one of the most expensive markets in 100+ years
It is more expensive than even the pre-1929 crash
And almost as expensive as the Dot Com bubble
The next crash will be very painful
A thread 🧵 2/ Understanding market valuations is tough for many investors
This is because the S&P 500 has a history of only moving up
Over time, stock prices rise, largely driven by increasing earnings
And this can make it seem like the market will always trend higher
Oct 21 • 10 tweets • 4 min read
This chart is making a lot of investors panic
But the data tells a different story for now
A thread 🧵 2/ Recently, some people have been comparing today’s market to the 1970s
If we overlay a 1970s chart on today’s interest rates, the similarities stand out
It’s easy to see why people get nervous when rates jump
But the data tells a different story
Oct 15 • 26 tweets • 9 min read
Everyone is now betting on a soft landing
This also happened in 2000 and 2008
We all know how they ended…
A thread 🧵 2/ In Feb 2007, the Federal Reserve Chair, Ben Bernanke, predicted a "soft landing" for US
Even the International Monetary Fund shared this optimistic outlook at the time
Both predictions came just before the Great Financial Crisis
Oct 14 • 13 tweets • 4 min read
Gold has just made new all-time highs
History shows this is a MAJOR warning signal
A thread 🧵 2/ Oct 2007:
Gold made a new ATH aftr 1.5 years
Soon after, the unemployment rate began rising rapidly