Billionaire investor Howard Marks compares the current market to the mid-2000s bubble, touts bitcoin’s staying power, and offers several tips in a new interview. Here are the 12 best quotes.

Howard Marks
Howard Marks.

  • Oaktree’s Howard Marks discussed stocks and bitcoin, and shared several tips for investors.
  • The investor highlighted similarities between the current market and the mid-2000s bubble.
  • Marks underlined the importance of managing risks, not panic-selling, and staying skeptical.
  • See more stories on Insider’s business page.

Howard Marks drew parallels between the current market and the asset bubble that preceded the global financial crisis, highlighted bitcoin’s longevity, and argued rock-bottom interest rates may justify higher stock valuations, speaking during the latest episode of the “We Study Billionaires” podcast.

The billionaire cofounder and co-chairman of Oaktree Capital Management advised investors to carefully manage their portfolio risk, resist the urge to buy high and sell low, and be skeptical of grand claims.

Here are Marks’ 12 best quotes, lightly edited and condensed for clarity:

1. “The pandemic was like a meteor hitting the Earth from outer space. The market decline was not born out of excess optimism. The recovery was not merely a bounce back from excess pessimism, it was the result of the greatest economic rescue effort in history.” – arguing the past 18 months shouldn’t be viewed as a traditional market cycle.

2. “There certainly are similarities that cause Jeremy Grantham and others to say ‘bubble territory’ and to blow the whistle of caution.” – comparing the hype around several assets in 2006 to the current market boom.

3. “If investors can think of an asset class and say, ‘Oh, for that, there’s no price too high’ – that’s one of the greatest indications of a bubble.”

4. “We have the lowest interest rates in history. That would simplistically argue for the highest asset valuations in history.”

5. “I came out very strongly against bitcoin in 2017. I was extremely negative, I was extremely outspoken. I had a knee-jerk reaction to something new. Now I prefer to say, ‘I don’t know enough about it to have a strong opinion.’

6. “Bitcoin has been around now for a dozen years. If it’s a flash in the pan, it’s an awful long pan.”

Read more: ‘It’s begging to be destroyed’: A stock trader who says he made more than $100,000 shorting the market during the 2008 crash just bet against the S&P 500 – and warns there’s a ‘fair chance’ stocks are about to drop 25%

7. “One of the most important aspects of being a good investor is you try to set things up so that if things go your way, you do great. But if things don’t go your way, you still do okay.”

8. “Good investing is not a matter of buying good things but buying things well. And if you don’t know the difference, then you shouldn’t be doing much investing.”

9. “Don’t get in the way of the compounding machine. Just get out of the way. Don’t screw it up.”

10. “When you’re in an area which is beset with uncertainty, variability, unpredictability, randomness, things like that – it just strikes me as folly to be confident that you know the future.”

11. “Active investors are in this business to buy low and sell high. But everything in our nature conspires to make us buy high and sell low. It is essential to combat those instincts.”

12. “Somebody comes into your office and says, ‘I’ve been managing money for 30 years, I’ve made 11% a year, and I’ve never had a down month.” Your job is to say, ‘That’s too good to be true, Mr. Madoff.'” – urging investors to always be skeptical of fantastic claims and promises.

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Warren Buffett’s global market indicator hits a record 142%, signaling stocks are too expensive and could crash

warren buffett newspaper
Warren Buffett.

  • The global version of the “Buffett indicator” has reached a record high of 142%.
  • Warren Buffett’s namesake gauge divides the total market cap of global stocks by worldwide GDP.
  • Buffett said the indicator spiking before the dot-com crash was a “very strong warning signal.”
  • See more stories on Insider’s business page.

Warren Buffett’s favorite market indicator has surged to a record high of 142%, signaling US and international stocks are heavily overpriced and could plummet in the months ahead.

The global version of the “Buffett indicator” takes the combined market capitalization of the world’s publicly traded stocks, and divides it by global GDP. A reading north of 100% indicates the global stock market is overvalued relative to the world economy.

“BOOM! Global stocks have gained another $1.6 trillion in market capitalization this week,” Welt market analyst Holger Zschaepitz tweeted on Sunday. “Equities now worth $120.3 trillion, highest in history.”

“Global stock market cap now equal to 142% of world GDP, an all-time high as well,” he added.

Buffett trumpeted his namesake gauge in a Fortune magazine article in 2001. The billionaire boss of Berkshire Hathaway described it as “probably the best single measure of where valuations stand at any given moment.”

Moreover, Buffett said it should have been a “very strong warning signal” when the yardstick skyrocketed during the dot-com bubble. He added that buying stocks at a reading of 70% or 80% would likely be lucrative, but investors would be “playing with fire” when the ratio approaches 200%.

The US stock market is firmly in “fire” territory with a current Buffett indicator reading of 208%. That figure is well above its 187% reading in the second quarter of 2020, when the pandemic was in full swing and GDP was about 15% lower.

However, the Buffett indicator isn’t flawless. For example, it compares the current value of the stock market to past GDP. Governments around the world have also battled the pandemic by ramping up stimulus and shutting down large parts of their economies over the past 18 months, artificially inflating the yardstick’s readings.

Here’s the global version of the Buffett indicator:

Global Buffett Indicator
The global version of the Buffett indicator.

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Ark Invest’s Cathie Wood touts Tesla and Zoom, dismisses bubble fears, and responds to John Paulson’s bitcoin critique in a new interview. Here are the 8 best quotes.

Cathie Wood
Cathie Wood.

  • Cathie Wood trumpeted Tesla’s growth prospects and predicted Zoom will usurp Cisco.
  • The Ark invest chief also praised Robinhood and brushed off concerns of a market bubble.
  • Wood responded to John Paulson’s dismissal of crypto, arguing bitcoin is more than digital gold.
  • See more stories on Insider’s business page.

Cathie Wood predicted Tesla’s stock price will quadruple in about four years, suggested Zoom could replace legacy companies like Cisco in enterprise communications, and praised Robinhood for attracting young people to investing in a Yahoo Finance interview this week.

The Ark Invest chief and popular stock picker also responded to billionaire investor John Paulson’s recent dismissal of cryptocurrencies, brushed off concerns about market bubbles, and reiterated her view that a technological revolution is coming.

Here are Wood’s 8 best quotes from the interview, lightly edited and condensed for clarity:

1. “Our base case for Tesla is $3,000.” – Wood expects Elon Musk’s electric-vehicle company to quadruple its market capitalization to nearly $3 trillion by 2025, partly because its global market share has increased “fairly dramatically” in the past five years.

2. “Many people think of Zoom as nothing more than these video sessions. We think it’s going to start taking more share of the communications stack in technology. Zoom is on its way to usurping the role of players like Cisco. It’s not just about video and stay-at-home or even hybrid, it’s much bigger than that.”

3. “Robinhood has introduced a whole new generation to investing, thinking about their future, and learning the hard way. Some have experimented with options – it doesn’t take long to lose a lot of money with options, and they learn quickly. I actually think Robinhood has done a great service to the investment community.”

4. “John Paulson made an incredible call during the mortgage crisis. What we think he’s missing about cryptocurrencies is they’re much more than a store of value or digital gold. Bitcoin is a new, global monetary system that is completely decentralized and not subject to the whims of policymakers.”

5. “If regulators get together and agree what exactly these cryptocurrencies are, how to define them, that will be a good thing. Certainty will be a good thing for this ecosystem.”

6. “This is the echo of the baby boom. I lived through the baby-boom years and that equity-market move, it was magnificent. I do feel we are in the same place now.” – predicting the bull market will continue for another decade.

7. “We have never been in a period in history where we’ve had five major innovation platforms, involving 14 different technologies, all moving into “S” curves, the curves feeding one another. We’re in a period of explosive innovation. “

8. “Are we in a bubble? We couldn’t be further from it. The average investor doesn’t understand how provocative these next five to 15 years are going to be, as these S curves feed one another and enter exponential growth trajectories that we have never seen before.”

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Short seller Jim Chanos has mocked meme-stock buyers, dismissed crypto, and warned the current market boom dwarfs the dot-com bubble. Here are 14 of his best tweets.

GettyImages 488325214
Jim Chanos.

  • Jim Chanos has ridiculed meme-stock buyers and warned about the asset-price boom.
  • The short seller and Kynikos Associates boss has also questioned Tesla, Virgin Galactic, and crypto.
  • Here are 14 of Chanos’ best tweets.
  • See more stories on Insider’s business page.

Jim Chanos has blasted retail investors as greedy and entitled, warned the current market boom dwarfs the dot-com bubble, and sounded the alarm on cryptocurrencies in recent months.

The veteran short seller and Kynikos Associates boss has also criticized Tesla CEO Elon Musk, dismissed China’s regulatory crackdown as predictable, and compared Warren Buffett’s business model to short selling.

Chanos – who shot to fame for anticipating Enron’s collapse, and now holds short positions against Tesla and AMC Entertainment – tweets using the handle @WallStCynic.

Here are 14 of Chanos’ best tweets, lightly edited for clarity:

1. “Asset prices are up across the board in 2021 (even bitcoin), and the S&P 500 is less than 3% off its all-time high. The sense of entitlement that investors have today is … something.” (July 20, 2021)

2. “$GME is up 780% and $AMC is up 1,470% this year. $AMC has tripled in the past three months. This is not outrage, it is greed. The newest generation of entitled retail ‘investors’ must win all the time, or they cry and blame ‘them.'” (August 5, 2021)

3. “The $AMC apes are openly discussing shorting the Robinhood IPO to ‘stick it to them.’ Anyone else see the irony there?” (July 2, 2021)

4. “Scientists believe the ‘Dragon Man‘ went extinct trading YOLO options on Robinhood.” (June 26, 2021)

5. “I was there as well … what is much crazier now is that the concept and fraud-y stocks are 5-10x the market cap today than in early 2000. And burning much more cash now. Also, no crypto/housing speculation in 1999-2000. Finally, there were no $20-30 billion ‘short-squeeze’ plays then.” (July 31, 2021)

6. “If only we could combine the worst aspects of the the 1997-99 dot-com bubble with those of the 2003-06 residential real estate bubble…” “Hold my beer!” – commenting on companies helping people buy homes through crowdfunding or using their parents’ investments as collateral. (June 29, 2018)

7. “The number of outright scams going on in crypto right now is breathtaking. #GoldenAgeOfFraud” (May 26, 2021)

8. “God save us from yet another 16-year-old crypto CEO in a hoodie claiming they are changing the world.” (August 12, 2021)

9. “You mean to tell me that a totalitarian Communist government can change industries by edict overnight? Interesting. $BABA $DIDI $EDU $GOTU $TAL” – commenting on the Chinese government reining in Alibaba, Didi, and other major companies. (July 23, 2021)

10. “Do you know which companies don’t rally 27% after successful product tests? Companies that people trust. $SPCE” – commenting on Virgin Galactic’s stock soaring after a successful test flight (May 24, 2021)

11. “Tesla ‘FSD’ does not exist. Hundreds of billions of market cap depend on $TSLA and Musk maintaining this fiction. Their driver-assist software remains at Level 2, by their own admission. And despite all the miles-driven everyone points to. These are facts.” – questioning the reality of Tesla’s full self-driving system. (April 3, 2021)

12. “All hail the infallible God of Mars … all unfavorable outcomes are due to the efforts of his technically incompetent knights. Further developments shall come forth in two months, three months maybe. $TSLA” (July 10, 2021)

13. “Lol, Toyota unveiled their robot four years ago. And it wasn’t a man in a leotard.” – ridiculing Tesla for unveiling its humanoid robot using a person dressed up as a robot. – (August 20, 2021)

14. “Buffett’s main business (insurance) is short-selling. It’s the biggest short-selling business there is.” – Chanos explained in a previous tweet that shorting is borrowing money at an uncertain cost, and Buffett’s Berkshire Hathaway invests the premiums it collects from its insurance operations without knowing exactly how much it will pay out in claims. (February 5, 2021)

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Warren Buffett’s favorite market indicator hits 205%, signaling stocks are way too expensive and a crash may be coming

Warren Buffett
Warren Buffett.

  • Warren Buffett’s preferred market gauge hit 205%, signaling stocks are heavily overvalued.
  • The “Buffett indicator” compares the stock market’s valuation to the size of the economy.
  • Buffett has said the gauge spiking is a “very strong warning signal” of a future market crash.
  • See more stories on Insider’s business page.

Warren Buffett’s favorite market indicator has climbed to 205%, signaling stocks are vastly overpriced and a crash may be coming.

The “Buffett indicator” takes the combined market capitalization of all publicly traded US stocks, and divides it by the latest quarterly figure for gross domestic product. It serves as a rough gauge of the stock market’s valuation relative to the size of the economy.

The Wilshire 5000 Total Market Index closed just shy of $46.69 trillion on Wednesday, as the S&P 500 and Nasdaq indexes ended the day at record highs. Meanwhile, the latest estimate for second-quarter GDP is $22.72 trillion, putting the Buffett indicator at 205%. That reading is well above the 187% it reached in the second quarter of 2020, when the pandemic was in full swing and GDP was about 15% lower.

Buffett praised his namesake gauge in a Fortune magazine article in 2001, touting it as “probably the best single measure of where valuations stand at any given moment.”

When the indicator surged to a record high during the dot-com bubble, it should have been a “very strong warning signal” of an impending crash, the famed investor and Berkshire Hathaway CEO added. The yardstick also soared in the lead-up to the global financial crisis, making it a useful tool for anticipating downturns. Both times, the indicator remained under 150%.

Read more: The threat of a stock market sell-off is growing, according to Bank of America. Here’s how investors can protect themselves from ‘fragility,’ and a simple options strategy that will buy them more upside.

However, the gauge is far from perfect. For example, it compares the previous quarter’s GDP to the stock market’s value today. GDP also excludes overseas income, whereas US companies’ market caps reflect the value of both their domestic and international operations.

Moreover, the pandemic has disrupted economic activity and depressed GDP since last spring, while also spurring the federal government to support companies, propping up markets in the process. As a result, the Buffett indicator’s readings may be artificially inflated, and could fall as the economy recovers and corporate aid is withdrawn.

Buffett’s indicator isn’t alone in predicting a painful sell-off. Michael Burry, the investor of “The Big Short” fame, warned earlier this year that the stock market is “dancing on a knife’s edge” and the “mother of all crashes” is coming. Jeremy Grantham, the market historian and GMO cofounder, has also sounded the alarm on a “fully-fledged epic bubble” that he expects to burst spectacularly.

Here’s the St Louis Fed’s version of the Buffett indicator (both market cap and GDP are indexed to the fourth quarter of 2007):

Buffett indicator
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A rise in long-term interest rates will be ‘kryptonite’ for a stock market that is already ‘in the biggest bubble of my career’ investment chief Richard Bernstein says

Richard Bernstein

Investment chief Richard Bernstein thinks if long term interest rates rise further, this could burst the bubble he sees in stock markets today – which could be the biggest one of his career, he said.

In an interview on CNBC’s Trading Nation, Bernstein said he believes investors have bought into long duration assets because of low long-term interest rates thanks to Federal Reserve policy, leading to a bubble in the stock market. Long-duration assets could include the far end of the Treasury yield curve, bitcoin, tech or even meme stocks, he said.

“The Fed has so distorted the long-end of the curve that we are seeing a very natural reaction among long-duration assets which is then taking on a life of its own. And I think anybody who’s out there in these long-duration assets has to be firmly convinced that long-term interest rates are not going to go up, because that’s the kryptonite for this bubble,” Bernstein said.

“I personally think we are right in maybe the biggest bubble of my career,” he added.

Stocks have been rising for well over a year and hit record high after record high, as the US economy has recovered from the fallout of the COVID-19 pandemic. This has led to widespread talks of a bubble and many investment experts have been urging caution about the potential for a crash.

Billionaire Jeremy Grantham’s investment firm GMO called the current environment a global growth bubble last month, while ‘Rich Dad Poor Dad’ author Robert Kiyosaki told investors to prepare for a market crash and even retail traders agree, with 40% of them saying there is a bubble – but they do not believe markets will actually crash.

Bernstein urged retail investors to diversify away from those highly frothy assets, while the market is still in a bubble and investing seems simple.

“For the same reason we carry a spare tyre in our trunk, for the same reason we have a fire extinguisher in our homes, that’s the reason why you have to diversify and when you get into a bubble, diversification becomes more important because we know the bubble is going to burst, but we don’t know when,” Bernstein said.

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The Delta coronavirus variant will hit the reflation trade in the casino-like stock market, says top analyst David Rosenberg

Trader on the floor of the New York Stock Exchange
US stocks are near record highs despite rising COVID-19 cases.

  • Top analyst David Rosenberg recommended investors stay away from “reflation” stocks as Delta COVID-19 cases climb.
  • He told CNBC that rising cases and a reduction in fiscal stimulus will create headwinds for the US economy.
  • Rosenberg said the stock market has become like a casino, but the bond market tells the truth about the economy.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The rise in Delta-variant coronavirus cases and a reduction in fiscal stimulus will weigh on the US economy over the next several months, leading market analyst David Rosenberg has said.

Rosenberg said on CNBC that investors should therefore stay away from the “reflation” stocks that tend to do better when the economy is stronger. Such reflation stocks have typically included banks and energy companies.

He also warned the equity market has become like a casino that is detached from economic reality.

“The on-again, off-again massive fiscal stimulus is in the rear-view mirror, and so we have that, and we have the question marks in front of the Delta variant,” he told CNBC’s “Trading Nation” on Friday. “It’s going to be a very challenging outlook for the economy in the next several months.”

Read more: Goldman Sachs says these 31 downtrodden, virus-exposed stocks are poised for a resurgence as they offer robust double-digit sales growth through year-end

“You don’t have to basically abandon the stock market, but I definitely would not be in the value reflation cyclical trade,” said the analyst, who was Merrill Lynch’s most senior economist from 2002 to 2009 and is now the president of Rosenberg Research.

“I would be in the areas that are more, call it, defensive growth. That could be healthcare, consumer staples, could be utilities.”

The US registered a seven-day average of 79,763 new reported coronavirus cases on August 1, up from 32,068 two weeks earlier, according to New York Times data.

Rosenberg said that the stock-market has “frankly become a bit of a casino”, as the S&P 500 stands at around all-time highs despite a cloudy US economic outlook.

He highlighted the US’s second-quarter reading of gross domestic product, which missed expectations in late July. GDP rose at an annualized rate of 6.5%, compared with expectations of an 8.5% increase.

Rosenberg said the bond market is telling the truth about the economy, with yields down sharply from March highs as investors have priced in slower economic growth and inflation.

The yield on the key 10-year US Treasury note, which moves inversely to the price, has fallen to 1.234% from above 1.7% at the end of March. Investors tend to buy bonds and accept lower yields when they expect growth and inflation to be low.

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40% of retail investors think stocks are in a bubble but amateurs keep buying anyway, survey shows

A person using a mobile phone app to invest in stocks.
Retail trading boomed in 2020 during the coronavirus pandemic.

  • 40% of retail investors think stocks are in a bubble after a breakneck rally, according to a new survey.
  • But trading app eToro found that amateur investors remain keen on stocks and think a crash is unlikely.
  • eToro’s survey of 6,000 investors found that their biggest worry is inflation, which has soared in the US.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Two in five retail investors think global stock markets are in bubble territory, but think a crash is unlikely and appear to be happy to keep buying equities, according to a new survey.

Retail investors believe inflation is the biggest threat to their portfolios, a survey published by trading app eToro found this week.

Polling firm Opinium carried out the survey for eToro and spoke to 6,000 retail investors across 12 countries, including the UK and US, who did not have to be eToro users. It gives a sense of how amateur investors view markets as economies recover from the pandemic.

Although 40% of retail investors said equity markets are in a bubble, 15% said they are fairly valued or undervalued. Another 45% said they neither agreed nor disagreed that they were overvalued, suggesting some uncertainty about the future path of securities. A bubble is typically seen as a moment when stock prices rise rapidly and are higher than justified by fundamental factors such as the health of the economy.

A considerably lower proportion of retail investors think stocks are about to crash than think they are in a bubble, however, with 27% predicting a sharp drop before the end of the year.

Read more: The CEO of the investment-research firm Fintel shares 3 market sectors where insiders are buying and details how his tool can help retail investors identify opportunities

Stocks have soared since the pandemic-induced crash of March 2020, especially in the US. The benchmark S&P 500 has risen more than 90% since its March 2020 low, and US equities are regularly hitting record highs, even as the global pandemic continues.

“It’s worth remembering that while valuations are high, equities are currently cheap compared to bonds,” said Ben Laidler, global markets strategist at eToro.

“The fact that just one in four investors believe that another correction is due before the end of the year suggests that many of them are willing to carry on paying current valuations – for now, at least.”

Just shy of 40% of retail investors believe rising inflation is the biggest threat to their portfolio, eToro’s survey found. But that number rises to 51% in the US, where year-on-year inflation jumped to a 13-year high in June.

eToro found that traditional inflation hedges such as real estate were popular portfolio picks, while a large number of investors were keen on gold.

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Stocks are due for a pullback of up to 8% in the next 3 months, says LPL Financial

traders
Traders on the floor of the New York Stock Exchange.

  • The S&P 500 looks due to pullback by 5%-8% in upcoming months after a strong performance year-to-date.
  • LPL Financial outlined its view as the benchmark index has nearly doubled since last year’s low amid the pandemic.
  • The S&P 500 hasn’t had as much as a 5% pullback since October 2020.
  • See more stories on Insider’s business page.

The US stock market roared back swiftly from its pandemic-induced crash last year and the S&P 500 has notched a double-digit gain so far in 2021 – but its performance puts the benchmark in line for a pullback by up to 8% before the year ends, says LPL Financial.

The gauge of the largest listed companies in the US has advanced by nearly 18% this year, with record highs supported in part by expectations of robust growth in corporate earnings as companies work to regain their footing as the pandemic eases.

The S&P 500 finished 2020 up 16% by clawing out of the bear market it slid into in March 2020 as the coronavirus pandemic unfolded. The index also finished strongly in 2019, springing up by 29%.

“After more than a 90% rally off the March 2020 bear market bottom (and near double on a total return basis) we do think the odds are much higher of a standard 5-8% pullback during the historically troublesome August/September/October period,” said Ryan Detrick, chief market strategist, and Jeff Buchbinder, equity strategist, at LPL Financial, in a Monday note.

“This isn’t a bad thing though, as some type of break could be necessary before another move higher,” the strategists said in outlining what they consider six surprises in markets so far this year.

The S&P 500 through Tuesday’s session had risen by 98% since its crash and bottom on March 23, 2020. Its climb started after the index slid 34% from its peak set in mid-February 2020, with investors rattled by the prospect of an economic recession from the COVID-19 outbreak. The index staged a fast recovery in reaching an all-time high in August 2020.

“Historically, year two of a bull market can be choppy and quite frustrating. After the huge gains we saw the last nine months of 2020, we entered 2021 expecting there to be more give and take than we’ve seen this year,” said the strategists. “In fact, the S&P 500 hasn’t even had as much as a 5% pullback since October 2020, one of the longest streaks ever. That is very surprising indeed.”

The S&P 500 has been fueled by anticipation of improved earnings. Ahead of this week’s busy docket for financial results, S&P 500 companies were on track for their best profit growth since 2009, with Refinitiv estimating a rise of 78.1% year-on-year in the second quarter.

The strategists also said they’ve been surprised by the lack of volatility so far in 2021. The stock market’s fear gauge, the Cboe VIX Volatility index, has dropped by 22%, hovering around 17.

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Expert investor James Stack warned of rampant market speculation, predicted inflation, and blasted the Fed in a recent interview. Here are the 8 best quotes

James Stack
James Stack.

  • James Stack called out massive speculation in stocks, real estate, crypto, and other markets.
  • The investor said Federal Reserve policies are fueling reckless behavior on Wall Street.
  • Stack drew parallels between the current market boom and the dot-com and housing bubbles.
  • See more stories on Insider’s business page.

James Stack warned of rampant speculation across multiple markets, rang the inflation alarm, and urged investors to be careful in a recent MarketWatch interview.

Stack is the founder and CEO of Stack Financial Management, as well as the publisher of the InvesTech Research newsletter. He compared the Federal Reserve’s stimulus efforts to spiking Wall Street’s punchbowl, cautioned houses are more overpriced now than during the mid-2000s housing bubble, and likened the hype around SPACs and NFTs to the dot-com boom.

Stack’s firm takes a “safety-first” approach to investing, paying close attention to market risk and historical trends. It boasted a $1.2 billion stock portfolio at the end of March, which included a $97 million stake in Microsoft, and roughly $50 million stakes in each of Accenture, Cisco, and Walmart.

Here are Stack’s 8 best quotes from the interview, lightly edited and condensed for clarity:

1. “The Fed brought the punchbowl back to the party and, particularly when the pandemic hit, they decided to add more and more alcohol to it. There’s a lot of participants on Wall Street investing like they’re a little bit inebriated.” – describing the impact of the Federal Reserve’s expansionary policies since 2019.

2. “We have more of an upside disparity between housing prices and long-term inflation than we did in the housing bubble in 2005.” – Stack Financial’s housing barometer estimates US house prices are 43% above the long-term inflation trend, exceeding their 35% premium in 2005.

3. “Speculative psychology tends to spill over into multiple asset classes. Stocks are very, very expensive by most historical measures, but we’re also seeing it in real estate, we’ve seen it in cryptocurrencies – bitcoin shot up to $60,000 and now is struggling to stay above $30,000.”

4. “Our housing prices have gone ballistic. It seems that everyone’s quitting their job to become a realtor. It brings back all the memories of 2005-2006.” – describing the local housing market in Flathead Valley, Montana.

5. “Speculative excess is spilling over into all of the new IPOs, the SPACs. We’re raising money and we don’t know what we’re going to do with it. Then we’ve got the new NFTs, digital art – it’s so extreme, it’s almost nonsensical. But it’s not unusual. We saw it in the late 1990s, when companies could go public that had never made a penny. We’re starting to see a lot of that today in the meme stocks favored by new, young traders.”

6. “The bubble is invisible to those inside the bubble. Don’t go to someone investing in NFTs and try to tell them that they’re speculating in a bubble that could be almost worthless. You’re going to get in an argument that you can’t win except in the aftermath.”

7. “We are in one of the most overvalued markets in history and one of the most speculative-excess periods in history, so you don’t have to be fully invested today. If you’re going to invest in today’s market, don’t go out buying the SPACs, or the stocks that have infinite PE ratios, because they have yet to make earnings. I would put higher allocations into those sectors that are going to benefit from, or at least be resilient to, increasing inflation.”

8. “When the Fed does decide to start taking the punchbowl away, growth stocks are where the pains could be felt the greatest. Think ‘safety first,’ walk softly, and carry a comfortable cash reserve.”

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