Author Topic: 'A bit of a bubble' in stocks: Berkshire director  (Read 4623 times)

VersaillesinNY

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'A bit of a bubble' in stocks: Berkshire director
« on: September 19, 2013, 12:46:01 PM »
Meryl Witmer, Eagle Capital Partners, reveals what she's learned from Wall Street legends.

http://www.cnbc.com/id/101046912?utm_source=twitterfeed&utm_medium=twitter

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"The greatest enemies of knowledge is not ignorance; it is the illusion of knowledge"
Stephen Hawking
« Last Edit: September 19, 2013, 12:56:55 PM by VersaillesinNY »


VAL9000

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Re: 'A bit of a bubble' in stocks: Berkshire director
« Reply #1 on: September 19, 2013, 02:58:56 PM »
I think more specifically the bubble is forming in ETF's - basically the S&P 500 index.  It's still early, but I noticed over the past couple of years everybody who I talk to about personal finance says "you should definitely be in ETFs" for a number of reasons.  Generally I agree with the reasons, but whenever everybody says the same thing ("gotta be in tech", "gotta be in real estate", "gotta be in tulips"), it doesn't end well.  I think it's time to start paying attention.

Anyone know where to get valuation metrics on S&P 500 vs. non S&P 500 in aggregate?  I'd be interested in the relative ratios like P/E, P/B, etc.

JBird

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Re: 'A bit of a bubble' in stocks: Berkshire director
« Reply #2 on: September 19, 2013, 03:14:54 PM »
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VAL9000

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Re: 'A bit of a bubble' in stocks: Berkshire director
« Reply #3 on: September 19, 2013, 03:28:29 PM »

JBird

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Re: 'A bit of a bubble' in stocks: Berkshire director
« Reply #4 on: September 19, 2013, 04:05:04 PM »
I don't mean to be rude; merely typing in "S&P 500 earnings history" gives you all your answers.
« Last Edit: September 19, 2013, 04:09:26 PM by JBird »
Woman and wine, games and deceit, make the wealth small and the wants great. - Ben Franklin

Myth465

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Re: 'A bit of a bubble' in stocks: Berkshire director
« Reply #5 on: September 19, 2013, 04:24:47 PM »
I am considering selling. I am starting to feel smart which tells me its time to raise cash.

Hielko

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Re: 'A bit of a bubble' in stocks: Berkshire director
« Reply #6 on: September 19, 2013, 04:52:07 PM »
I don't mean to be rude; merely typing in "S&P 500 earnings history" gives you all your answers.
The question was how expensive the S&P500 is relative to the US stocks that are outside the index. That's not that easy... Could be interesting, but I doubt that ETF's have a huge impact because there are plenty of stocks outside the S&P500 that are also in some ETF. That said, with more money going to ETF's it almost must be that markets get less efficient.

sigis

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Re: 'A bit of a bubble' in stocks: Berkshire director
« Reply #7 on: September 19, 2013, 05:37:03 PM »
I had exactly the same thought - ETF popularity should be overall good for value investors and stock pickers in general

twacowfca

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Re: 'A bit of a bubble' in stocks: Berkshire director
« Reply #8 on: September 19, 2013, 06:41:59 PM »
I don't mean to be rude; merely typing in "S&P 500 earnings history" gives you all your answers.
The question was how expensive the S&P500 is relative to the US stocks that are outside the index. That's not that easy... Could be interesting, but I doubt that ETF's have a huge impact because there are plenty of stocks outside the S&P500 that are also in some ETF. That said, with more money going to ETF's it almost must be that markets get less efficient.

It's a form of kurtosis.  Markets driven by ETFs should tend to make little distinction among good and poor prospects for many companies while becoming enamored of a few stocks that reach bubble valuations. (hyper normal for most stocks as the market rises, but near the peak a fat tail for the few favored industries and stocks.)  Then, when the bubble pops, a fat tail on the downside with huge sell offs for over priced or low quality/value stocks.
« Last Edit: September 19, 2013, 06:45:47 PM by twacowfca »

Packer16

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Re: 'A bit of a bubble' in stocks: Berkshire director
« Reply #9 on: September 19, 2013, 06:50:41 PM »
I think you saw this in the tech bust where value managers of most stripes were able to outperform the S&P 500 for 3 years.

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