Saturday, August 22, 2015

Beware of the Warning that There Is a Bubble in Stock Market Bubble Warnings

August 11, 2015
MarketWatch: Opinion: Beware of the bubble in stock market bubble warnings

It's sure been a rough 10 days for those who found comfort in his warning.

Today’s equity market doesn’t resemble the one in 2000


The dividend premium.

Unlike the dotcom bubble, investors are flocking to dividends and dividend growth. Some even call it chasing yield. Agreed.

Shares of new corporate cash from equity issuance.

Unlike the dotcom bubble, corporations are generally buying their own stock instead of selling it. The more they buy the more the public buys. That's great news for corporate executives with fat stock options! Agreed.

What could possibly go wrong? Here's a crazy theory. I'm really swinging for the unbelievable crackpot fences on this one.

What would happen if new corporate cash was coming from debt issuance? What if companies used that cash to buy their own shares and help fund their dividends? What if they were doing so because they thought all this cheap "junk" credit was a perpetual free lunch that only offered enormous upside and no downside?

What are the odds of that ever happening though? Like I said, it's a crazy theory. Nobody in this country embraces debt. It ranks right up there with being a McDonald's investor and worrying about a new chain of Puff the Magic Dragon restaurants appearing. Hey, I'm just being silly to make a point. Can you imagine? Puff the Magic Dragon? Hahaha!

May 29, 2015
Time: ‘Puff, The Magic Dragon’-Themed Restaurants Might Actually Happen

WTF! I want whatever they're smoking! Am I allowed to say that? Are there children present?

No word on whether these stores or restaurants will open in Colorado or Washington, where marijuana is legal for recreational use.

We can only hope... that there is no stock market bubble, again. Investors love those restaurant stocks. Everyone needs a place to eat! They just aren't making any more restaurants! Buy now or forever be priced out!

Shake Shack! Has both food and housing right in its name! Can't lose! Ever! Unless one bought the stock about three months ago. What's a 50% loss among friends? Opinion: That bubble HR Popnstuf'd.

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