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    Despite ridiculous P/E’s the risk of not buying outweighs that of buying.

    Some believe we’re seeing a repeat of 2021, when price-to-earnings (P/E) ratios seemed irrelevant and the market was overly optimistic. While the current market does have a feeling of a ridiculous bullish sentiment( caught, cough NVDIA ) , the macroeconomic conditions differ significantly from 2021.

    Today, things seem to once again be irrational, I agree to a certain limit . It’s difficult when even stocks like Costco have fan boys attempting to downplay the importance of valuation, P/E since they are ridiculously high, ratios still matter.

    HOWEVER. Today is much more different then 2021

    Please consider the broader context. For instance, the ongoing geopolitical tensions, including wars, have different implications now than in 2021. The Russia Ukrainian war was the only “invasion” that did not see the market gain some short time after. Every other invasion was a buying opportunity. Why ?

    Back in 2021, the Federal Reserve was tightening monetary policy, which restrained the market’s ability to recover from geopolitical tensions, such as the Russia-Ukraine conflict. This time, we are in a much more stable environment, characterized by a decrease in interested rates with a robust American economy, the exact opposite of 2021

    • Strong job reports
    • Declining interest rates
    • Falling inflation
    • Invasion signal a buying opportunity the Middle East tensions have had zero impacts.
    • Oil is nowhere near as impactful as it once was in its golden days
      • Emerging technological advancements related to AI and robotics

    These factors contribute to a sense of American economic exceptionalism. So, while it’s natural to be cautious, there are strong reasons to remain optimistic about stock market opportunities.

    I believe that the risk of missing out on buying shares outweighs the risk of investing during market dips. Just like the major tech companies have invested heavily in areas like NVIDIA and chips, they ultimately need to deliver profits. However, the real danger lies in not investing at all.

    Don’t let fear hold you back from investing

    Despite ridiculous P/E’s the risk of not buying outweighs that of buying.
    byu/whoisthelogos inwallstreetbets



    Posted by whoisthelogos

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    15 Comments

    4. MBA_Throwaway1112 on

      I don’t understand how people think the market is overvalued. QQQ is maybe 20% above its dec 2021 peak, and that gain is even less due to inflation over those years. Yea its pumped a ton the last year, but Its getting back on track

    5. AtheIstan on

      Rainbow bears just believe that a ‘soft landing’ is a meme and not something actually achievable. It’s like a conspiracy theory where every piece of good news is a lie and the market crash is just around the corner.

    6. TheVishual2113 on

      Stocks are just designed to transfer wealth from the poor to the wealthy, they will always go up

    7. gnocchicotti on

      It’s still a good time to diversify into some measure of fixed income. That was a lot harder of a decision when stocks previously seemed overvalued but fixed income paid zero.

    13. NOT_MartinShkreli on

      When fear of missing out is the reason to be in the market for most people … it’s time to get out

    15. SnooMarzipans902 on

      Let me ask you this.

      What happens when the jobs report turns sour.
      Inflation takes off again.
      Interest rates stay higher for longer.
      The war is no longer bullish.
      Oil and energy cost go up ( the one that increases the cost of everything else the most).
      Not to mention wage gains adding to it.

      Is the macro condition still stable and good for these insane PEs?
      Does that help justify the price?

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