원문 보기
one of the big investor questions right now is are we in a stock market bubble if so is this the time that we should be reducing our stock allocations is a crash coming that could equal the dot-com or 2008 crashes well i always like to keep track of how the big investors are seeing the market right now and it seems that the big investors are divided ray dalio is one of the top investors in the world he has built a 20 billion dollar fortune and he runs the world's largest hedge fund now ray has recently published a piece of work called are we in a stock market bubble which included some excellent analysis on previous big bubbles and where he thinks we are right now so for your convenience i have turned this analysis into a video to make it nice and easy to go through so we can all understand what is going on right now and here's the cool thing the great benefit to us is that this has been done by ray dalio and his team of world-class analysts and we get to peek behind the curtain and see how the professional hedge funds are seeing the stock market right now and so in this video we will be looking at the six bubble indicators these are the six indicators that ray dalio assesses for stock market bubbles we'll then answer the question are we in a bubble right now we'll then get ray dalio's own personal opinion on the matter and then we'll finish with a bit of a bonus which is ray dalio talking through his different indicators as that's always appreciated and thank you to everyone who does okay so does ray dalio think we are in a stock market bubble let's find out so these are ray dalio's six bubble indicators that he uses to look for stock market bubbles and they are number one how high are prices relative to traditional measures number two are prices discounting unsustainable conditions number three how many new investors have entered the market number four how broadly bullish is sentiment right now number five our purchases being financed by high leverage and number six have buyers made large extended forward purchases and then he back tested these six bubble indicators against some of the biggest bubbles in the last 100 years so starting with the 1929 bubble these were the indicators so at the time how high were prices relative to traditional measures and this read as bubble were prices discounting unsustainable conditions bubble how many new investors had entered the market bubble how broadly bullish was the sentiment bubble were purchases being financed by high leverage bubble had buyers made large extended forward purchases frothy so as you can see here nearly every indicator at the time was flashing bubble moving on to the dot-com bubble of the year 2000.
these were the indicators how high were prices relative to traditional measures bubble were prices discounting unsustainable conditions bubble how many new investors had entered the market bubble how broadly bullish was the sentiment bubble were purchases being financed by high leverage bubble and had buyers made large extended forward purchases bubble so this time every single indicator was flashing stock market bubble next we have the 2008 financial crisis let's see how it measured up how high were prices relative to traditional measures no bubble were prices discounting unsustainable conditions no bubble how many new investors had entered the market frothy how broadly bullish was the sentiment frothy were purchases being financed by high leverage bubble had buyers made large extended forward purchases bubble so interestingly this time only two of the six were actually flashing bubble yet we still had one of the biggest stock market crashes of the last 100 years and finally right now in 2021 are we in a stock market bubble well before we look at the data let's get the opinion of ray dalio himself a lot of new ideas new technologies new things come along and they make fabulous revolutions and they and they grow things and that's great um but there's a tendency of investors to extrapolate the past and get uh and not pay too much attention to price and when that happens you start to emerge as somewhat of a bubble uh by our measures the bubble is not as what it was in 2000 and not what it was in 1929 but it's kind of like halfway there if i look at the types of uh qualities in other words and so what that means from a value point of view if you're calculating you know what can i realistically expect um you um it's expect a return shrink relative to the others however so right now in 2021 how high are prices relative to traditional measures dalio says only a bit frothy and this is the data so we do have a chart for each one of these indicators now he doesn't explain the methodology behind these charts as that is proprietary to the hedge fund we just get to see this end result so this particular chart goes back to 1910 and we can see it broke the 100 mark at 1929 there were some high readings throughout the year it had broke 100 percent of the year 2000 and as it stands right now we're at about 80 percent so it's definitely pretty high but not yet bubble territory number two are prices discounting unsustainable conditions dalio says no bubble and this is the data so again we have a very high reading in 1929 a very high reading in the 1960s it was definitely flashing in the year 2000 and similar to the last chart not quite in bubble territory yet but it is very high so to me i wouldn't say this says no bubble i would say this is a little bit frothy but there you go number three how many new investors have entered the market dalio says for offee so this chart just goes back to the 1960s which had some high readings we can see it had broken through in the year 2000 and to me this is getting very close to bubble territory it's just about to break through again and he did make a separate comment on this saying that there is a lot of young retail investors coming into the market right now number four how broadly bullish is the sentiment right now dalio says frothy we have a reading from the 1970s which is pretty high late 80s was pretty high dot com as we saw always reading pretty high and again right now it's breaking through the 80 mark we did have the pandemic crash here and since then it is definitely jumped up and especially with this new two trillion dollar stimulus package sentiment is getting pretty high right now number five our purchases being financed by high leverage dalio says only a bit frothy so here we have a big reading in the year 2000 there was quite a lot of people using high leverage in 2015 and again right now it's not an absolute peak but it's pretty high levels and finally have buyers made large extended forward purchases dalio says no bubble again strong readings in the 1970s strong reading leading up to the dot-com crash and this is very cyclical as you see but i would say this is the only chart that has a very low reading so here's a summary of where we are at right now and interestingly not one of the six indicators is flashing as bubble only a couple as frothy okay so we're gonna finish with a bit of a bonus and it's a quick two-minute clip of ray dalio talking through his seven bubble indicators and notice this time that it is seven not six as since then he must have refined the process but see if he can spot what the extra one is who knows is it a bubble now so but you can see these elements exist in the bubble phase these are the bubble phase prices are high relative to traditional measures prices are discounting rapid future appreciation from these highs what i mean by that is you could look at market pricing and deduce from market pricing the picture that is being painted of what the future looks like in other words if i look at the relation between stocks and bond yields there's an implied growth rate and if i look at the relationship between inflation index bonds and nominal bonds i can calculate what the market is discounting in the form of future inflation rate and so the there's a picture of the future and if the future is different than in that picture that will determine the returns of asset classes there is more broad bullish sentiment in other words you're walking around and everybody says oh this is great and it's going to go up um then there are purchases financed by high leverage so that that's apparent you know buy on borrowed money buy stocks on borrowed money buy whatever the asset is buy how homes or whatever it is and then sometimes buyers have exceptionally extended forward purchases in other words built in inventory because they're worried that's going to go up i have a good inventory or contracted for supplies because they work up or maybe buy uh an apartment to speculate that the the price of the apartments are going to go up and people in general are buying those things and that particular appreciation and then in addition that there are new buyers who come in you know they never used to do it but now they're attracted to it because it's a hot market and so you see them coming up you know the classic example of the tulip mania you know okay you're coming in i need to have tulips and oh it's a great thing to have and you see that and then you see a stimulative monetary policy that is going to um inflate the bubble um and so when you see these things simultaneously you'll see a lot of those you can almost have that checklist and you can check off those things and when you start to see that you know that becomes largely um unsustainable so so there you are guys those were ray dalio's seven indicators he uses to assess stock market bubbles although some of these indicators to me did look quite high ray dalio does not believe we are in a stock market bubble but then if you look again at the data from 2008 only two of the six indicators were actually showing as bubbles and we still saw one of the biggest crashes in a hundred years if you haven't yet seen my video on how to prepare for a stock market crash be sure to check that out here personally i think it's all about being prepared as long as we are prepared for either direction we have a plan in place and we know what to do we can then just relax and let the market play out and do what it's going to do so there you are guys i will also keep you up to date on the opinions of other big investors as it's always good to cross-reference what other people think so hope you found this as that's always very much appreciated in fact thank you for everyone who does you guys are awesome if you haven't yet subscribed to the channel be sure
Comments 0