Go Against The Grain

Actually,  the market is selling at 20 times earnings projection for 2025. If you believe there’s no pick up in earnings from today’s level, the market is overpriced by as much as 20%.

 I’m assuming earnings go nowhere, interest rates hang on the high side if I’m right. The market could sell even below a mid-teen level. 

There’s another way of expressing how pricey waxes the technology sector.

This is not reverse pie-in-the-sky thinking. Look what happened to stocks like General Motors over a 5-year period. The stock sold over $40 a share near 2014 but sank below $20 a share in 2012.

The concept that blue chips are a polite, safe place for wealthy investors to park their assets is a foolish illusion. Traditional pie chart investment can be dangerous as in 2022 when both stocks and bonds declined in tandem, delivering a midterm loss of assets. 

The conservative families thought they were in good safe hands with our banks. And yet, our major banks like JP Morgan, Citigroup, and others managed trillions of families assets, a major profit center for them. 

My deep basic is there’s no such thing as polite investing. IBM was a blue chip for decades until the Watsons overcommitted their house and lost serious market share. They couldn’t live off electric typewriters forever. They had to call in an outside executive to save the company. 

In my time, IBM hired white shoe college grads. They also put them in white shirts and taught them how to sell data processing equipment in the fifties and sixties.  There was no room for young outsiders in such operations.  Instead we flocked over to Wall Street and took our chances. Against their better judgment a white shoe outfit hired me on the spot and the rest is history. 

Sooo…

Our Market is Pricey

The Fed Won’t Make US Rich

High Interest Rates Prove Deadly