Is there Another Stock Market Crash Coming?

Source: http://www.corruptionofrealmoney.com/education.php

Robert J. Sheller of Yale University re-complied S&P 500 from 1880 until today. In the past 6 months, S&P500 indicator is flashing red light again in the U.S. Stock market. This will affect the global stock market like in 2008. Below is a quick analysis.


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http://www.corruptionofrealmoney.com/displayfullarticles.php?id=59#.WS9os1OGMvr

 

PE ratio = Price of a stock / Earning of a company.
I think it Robert J. Sheller 's book Irrational Exuberance gives a more detail explanation regarding to his assumption.
But again, this is a very good indicator.

 

PE ratios are effectively related to interest rates. Low interest rates means capital chases yield on shares, driving prices up and PE ratios with it.

Therefore record low interest rates leads to record high PE ratios.

I'm not saying this is a good situation, nor that the market won't crash when interest rates normalise, just pointing out that historical metrics don't really apply. These are extraordinary circumstances.

 

living example like Venezuela come to mind
best performing stocks market

 

These are indicators that are flashing red light. If you revisit the chart from my article, there are at least 5 instances where the stock market crashes when the P/E ratio exceed 25, with the exception of the period around 1929 and 2000.

Not saying the stock market will 100% crash in 2017. But, the probability is high, especially for the second half of the year.

 

I agree with you that the measures the earnings (E) of a company changes over time. It depends on how a company reports it. They might understate it for taxation purposes. But, it cannot be too far from the truth.
The price of a share is what is the stock market trades.
PE ratio is just the Price of a stock / Earning of a company.

 

Robert J Sheller? Does not exist at Yale.
However, there is a Robert J Shiller and he is white

 

Thanks for pointing that out >.< A big mistake of mine. I have changed it back now. Thank you.
http://www.corruptionofrealmoney.com/displayfullarticles.php?id=59#.WTRWb1w2Ux8

 

The Shiller P/E is only one indicator, others would be unemployment rates, manufacturing index, bond yield curve, etc the crash will come but not in 2017, but that's just my opinion

 

It doesn't look like the smartest are buying stocks now.
Not if but when.
A quite reliable indicator is the amount good news out there.
The bigger, the closer that "when".
What is the amount good news lately?
This year so far, quite some increase here in my EU region.
Based on comparisons with a couple past same stories, I'd say the next crisis is for september / october.
After the flowers bees and sunshine vacations.
A next question could be where in the world its "center of gravity" (just the start, in the end the central planning linked it all together along its money shifting) will be.
Taking into account the monetary planning technique wherein currencies are kept within certain bands (snake in the tunnel), it will probably be in the US.


Dollar in its upper floating range.
Euro in its lower floating range.
Reversal time.
Buy euro's.
Sell dollars.
A remaining question then is what the trigger (read: excuse) will be this time.
Because usually some event serves as such.
In the late nineties there was the millennium fear. The CBGA gentlemen agreement. NY's WTC hit by planes and subsequent collapses.
The world didn't end then and won't end now.
Just that it makes some people making wrong decisions (read: lose money).
And that's the very purpose.
Use some peoples savings to buy houses holidays and whatever.
Scare them into willingness to pay whatever for whatever, after whatevers price was driven up.
Just another repeat after rinse.

 

Doesn't matter when he t crashes because it will climb even higher few years later.

Don't be the chump who didn't buy investment properties waiting for a crash

 

A crash can be a crisis as well as an opportunity. It can make you get rich a whole lot faster.

 

go hard don't be a chump

 

That's right, two asx codes to jump on when everything crashes is BEAR and BBUS