Taking Stock Of The Stock Market
My semi regular ramblings on the stock market
It’s been quite a year in equity markets so far in 2024. Thanks to AI, the subsiding of inflation, and optimism around the economy’s soft landing plus rate cuts, stock markets have boomed.
So much so that we’re starting to hear the b-word (bubble) get thrown around more and more. Yes, valuations are pretty stretched, especially for anything tangential to AI. But today’s market is also very different from that of a few decades ago.
Today’s stock market is dominated by lightning fast cycles. The quickness with which things come and go is shocking. In four years, we’ve had two big declines (COVID and 2022 inflation) and at least five bubbles (work-from-home, meme stocks, crypto plus NFTs, AI, and now crypto again). How quickly markets have soared, retreated, and soared again is like nothing I’ve ever seen before in my two decades of observing financial markets. And thanks to repeated massive injections of liquidity during every market crisis, investors have gotten used to these quick V-shaped recoveries as well as the massive dogpiles into whatever the latest hot asset happens to be.
Then again bubbles are not all bad. Actually I’ve come to like them. As long as you don’t buy at the peak and sell low, bubbles and the excitement that they…
