The current U.S. stock market valuation has reached 2000 and 2021 levels. Will this time be different?
Posted: Jan 07, 2025
- Three different valuation models (Buffett Indicator, CAPE ratio, Mean Reversion Model) are showing extreme overvaluation in the stock market, signaling potential bear markets.
- Interest Rate Model is close to being strongly overvalued.
- Yield Curve Inversion and Sahm Rule are indicating possible rough times ahead.
- Fed Funds Rate setup looks similar to 2007-2008, suggesting a potential recession.
- Inflation-adjusted S&P 500 chart shows a possible cooling period coming.
- Informal indicators include rapid surge in Tesla and Palantir stock prices, market participants buying risky assets, and momentum chasing behavior.
- Warning signs point to an incoming bear market, with positions in puts on Tesla, Palantir, MSTR, and SPY.
What do people on Reddit think?
🚨 Reddit sentiment: mixed/negative - There are mixed perspectives, with some users concerned about overvaluation and suggesting a bear market is on the horizon, while others express trust in the continued strength of the US market. However, there are more bearish views concerned with overvaluation, recession indicators, and skepticism of market timing. Summarized comments: - Comments suggest a bear market is incoming with multiple valuation models and recession indicators flashing red - Suggests buying puts on overvalued stocks like TSLA and PLTR - Some users express frustration about market timing and trying to realize profits - Some participants believe the US economy is strong and money will continue flowing into US markets, pushing it up another 15-20% before a major pullback - Concerns raised about SPY with P/E, P/S, and P/B ratios at bubble levels - Some users are skeptical of attempts to time the market, considering it rigged and advising to take profits on warnings - Discussion includes divergent views on whether to buy or sell amidst the current market circumstances Stock tickers discussed: $SPY, $TSLA, $PLTR
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