It’s the P/E ratio (the ration between the stock Price of a company and it’s Earnings) of the Nasdaq vs the Price.
Notice how the Nasdaq price has tracked the P/E, with since at least 2020 the stock prices not increasing because company earnings are going up but rather just from increased speculation hence the rise in the ratio of stock Prices to Earnings.
The P/E (in other words, the company stock prices relative to the actual money a company makes) is now about twice as much as back in 2020.
Moving your money to overseas markets isn’t going to protect it. Other countries are having similar liquidity and bond issues. When the bubble bursts it’s going to be world wide.
Also fundamentals don’t mean shit when the bubble pops. Everything will come crashing down because everyone is panicking and knows that everyone else is also panicking. It will have a domino effect and even markets that aren’t even part of the bubble will get hit.
I’m still invested in some US stocks, but I’m switching my US market exposure to an index fund that weights by actual sales, revenue, and other objective factors, rather than market cap. Companies don’t even get into the index unless they turn a profit first.
“Very soon” that’s what’s been said for years now. I too think this isn’t sustainable, but it sure feels like it’ll keep rolling for a number of years.
Can still make plenty of money in non-US index funds.
Though I must say, my EM Asia ETF blew up right in my face. Somewhat softened by the fact that I figured it was going to peak and sold at 61 EUR to rebuy more at 59. It just happened to drop further after holding near 59 for a while. But at least I skipped out on two euros worth of price drop AND bought more shares than I originally had.
One of the two things I have left in US-run ETF companies is, ironically, my lovely WisdomTree NASDAQ 100 3x daily short which went up a ton on Friday though. I’m predicting it’ll go up even more when SpaceX is admitted into the index lol
The main issue as usual is US hegemony (or what’s left of it) has a way of fucking up the rest of the world. When that bubble pops it’s going to cause a whole bunch of industries trouble.
Is it because for every american their only choice to get any retirement or any interest on savings is to put it into stocks? Followed by massive speculation that maybe (I dont know this part) is driven by machine code that not only follows trends but creates them by thinking if everyone is investing and line goes up, maybe this is where the money should go, which reaffirms the algorithm. Until it doesn’t.
Surely these two things are a factor. That and companies continually laying people off, or cutting costs, or selling data which give the illusion of making money when really it’s just juggling the books and has no long term future.
It’s because they keep printing more and more dollars and issuing debt, those extra printed dollars have to go somewhere and they buy more stocks with it.
People/mainstream media just assume stock market goes up means the companies are more valuable – for the past year or so it really just means the dollar has been going down aka inflation
Sure there is. It’s a pyramid scheme. It’ll work until it doesn’t. The people involved are just really good at moving assets around to give the illusion that line keep going up. To keep it growing they move assets from other safer markets (pensions to 401ks for example) and have lobbied to not be taxed or regulated so more and more capital gets dumped in. But stocks aren’t tied to anything more tangible then trust of the people holding the stocks. So long as the stock holders believe stocks are valuable they are. But like any good pyramid scheme eventually they will run out of suckers to bleed for cash and then BAM pyramid fall down.
It is even more extreme if you view the entire index history. The Covid peak looks almost benign in comparison and that was quite substantial but with a rather slow in rise and fall. Now, since the LLM bubble has been started, NASDAQ has almost doubled and in recent months almost feverishly. Nah, no bubble, nothing to see here, all based on reality. Please invest, we need to unload the bad money onto someone else.
I’ve pulled most of my money out of stocks stuck it in bonds. I have a few dividend ETFs like SCHD and some oil and energy sector stocks that I bought on the cheap before Trump fucked the oil markets.
It’s a giant bubble but there are sectors you can sit in defensively.
IMO the Space X and AI offerings are going to hoover up any liquidity left in a market that is showing less and less breath. Energy shortages will kill by July/August.
We launched attacks on Iran to distract from the Epstein files, leading to the closure of the strait of Hormuz and dwindling oil reserves around the world. It was only like 3 months ago, I’m surprised you didn’t hear about this
What you’re looking at returns on US stocks in Indian Rupees. So the sharp rise is US stocks going high + Indian Rupee deprecating against USD so earlier investments providing higher returns.
a bubble is a great place to make huge gains …… as long as you get out in time
usually a few companies survive the bubble pop. Their stock price baby also crashes but then recovers to “normal” valuation
I sit out bubbles because I recognize them but know I never know how to get out in time. But I do know some who succeed in riding the wave while still coming out the other side
I went 30% into international funds after the first recovery from Donald’s tariffs in spring 2025, when it became abundantly clear that our former trading partners were all hammering out new trade agreements. (Which take 1.5 - 2 years to take effect, but eventually they will and it’ll affect the US adversely.)
Been meaning to rebalance into money markets and bonds with how crazy this year’s been. This just makes me want to do that faster.
I’ve already withdrawn money I had invested in US.
You can’t convince me this isn’t bubble:
Here’s an even more interesting one:
It’s the P/E ratio (the ration between the stock Price of a company and it’s Earnings) of the Nasdaq vs the Price.
Notice how the Nasdaq price has tracked the P/E, with since at least 2020 the stock prices not increasing because company earnings are going up but rather just from increased speculation hence the rise in the ratio of stock Prices to Earnings.
The P/E (in other words, the company stock prices relative to the actual money a company makes) is now about twice as much as back in 2020.
Wow that’s a pretty wild statistic here. Is there historical precedent for this?
S&P 500 PE Ratio hit 120 in 2008, but thats because earnings collapsed.
Yup I moved mostly out of usd, no stocks listed in the US, no US Treasuries.
I see either default or massive inflation or both in the cards for the US very soon.
Moving your money to overseas markets isn’t going to protect it. Other countries are having similar liquidity and bond issues. When the bubble bursts it’s going to be world wide.
Also fundamentals don’t mean shit when the bubble pops. Everything will come crashing down because everyone is panicking and knows that everyone else is also panicking. It will have a domino effect and even markets that aren’t even part of the bubble will get hit.
Agreed, but they shouldn’t tank as bad and businesses with healthy profits and a history of dividends should bounce back quickly.
It’s just not worth paying capital gains to pull it out of the market.
Yea I don’t know why people think that this AI bubble is just in the USA, this is a global race, not just a US thing.
I’m still invested in some US stocks, but I’m switching my US market exposure to an index fund that weights by actual sales, revenue, and other objective factors, rather than market cap. Companies don’t even get into the index unless they turn a profit first.
Which index is that?
I’m curious as well!
pls share
“Very soon” that’s what’s been said for years now. I too think this isn’t sustainable, but it sure feels like it’ll keep rolling for a number of years.
“markets can remain irrational a lot longer than you and I can remain solvent.”
Yup I’m definitely foregoing upside but I don’t want to be stressing about trying to find the best time to exit every day.
Can still make plenty of money in non-US index funds.
Though I must say, my EM Asia ETF blew up right in my face. Somewhat softened by the fact that I figured it was going to peak and sold at 61 EUR to rebuy more at 59. It just happened to drop further after holding near 59 for a while. But at least I skipped out on two euros worth of price drop AND bought more shares than I originally had.
One of the two things I have left in US-run ETF companies is, ironically, my lovely WisdomTree NASDAQ 100 3x daily short which went up a ton on Friday though. I’m predicting it’ll go up even more when SpaceX is admitted into the index lol
The main issue as usual is US hegemony (or what’s left of it) has a way of fucking up the rest of the world. When that bubble pops it’s going to cause a whole bunch of industries trouble.
Hence why there is frantic effort in decoupling from USA and connecting with alternative markets in the rest of the world.
Yeah fucking finally too!
Every fucking american crisis bleeds into our countries every goddamn time, but they? Let’s do worse next time!! No regulation!! War!!
Aaaahrg.
/Rant off
Yup. Highest it’s ever been and there’s no explanation as to why. Not a sensible one anyway, given most are in the shit.
Is it because for every american their only choice to get any retirement or any interest on savings is to put it into stocks? Followed by massive speculation that maybe (I dont know this part) is driven by machine code that not only follows trends but creates them by thinking if everyone is investing and line goes up, maybe this is where the money should go, which reaffirms the algorithm. Until it doesn’t.
Surely these two things are a factor. That and companies continually laying people off, or cutting costs, or selling data which give the illusion of making money when really it’s just juggling the books and has no long term future.
It’s because they keep printing more and more dollars and issuing debt, those extra printed dollars have to go somewhere and they buy more stocks with it.
https://en.macromicro.me/charts/28906/SPX500-Index-vs-Dollar-Index
People/mainstream media just assume stock market goes up means the companies are more valuable – for the past year or so it really just means the dollar has been going down aka inflation
Sure there is. It’s a pyramid scheme. It’ll work until it doesn’t. The people involved are just really good at moving assets around to give the illusion that line keep going up. To keep it growing they move assets from other safer markets (pensions to 401ks for example) and have lobbied to not be taxed or regulated so more and more capital gets dumped in. But stocks aren’t tied to anything more tangible then trust of the people holding the stocks. So long as the stock holders believe stocks are valuable they are. But like any good pyramid scheme eventually they will run out of suckers to bleed for cash and then BAM pyramid fall down.
It is even more extreme if you view the entire index history. The Covid peak looks almost benign in comparison and that was quite substantial but with a rather slow in rise and fall. Now, since the LLM bubble has been started, NASDAQ has almost doubled and in recent months almost feverishly. Nah, no bubble, nothing to see here, all based on reality. Please invest, we need to unload the bad money onto someone else.
I’ve pulled most of my money out of stocks stuck it in bonds. I have a few dividend ETFs like SCHD and some oil and energy sector stocks that I bought on the cheap before Trump fucked the oil markets.
It’s a giant bubble but there are sectors you can sit in defensively.
IMO the Space X and AI offerings are going to hoover up any liquidity left in a market that is showing less and less breath. Energy shortages will kill by July/August.
Tf happened in Spring 26?
US Tariffs on everything, feels like a lifetime ago already doesn’t it?
Wasn’t that 25? And again bad for economics.
We launched attacks on Iran to distract from the Epstein files, leading to the closure of the strait of Hormuz and dwindling oil reserves around the world. It was only like 3 months ago, I’m surprised you didn’t hear about this
Of course I heard. Last I checked war and oil shortages weren’t good for the economy
What you’re looking at returns on US stocks in Indian Rupees. So the sharp rise is US stocks going high + Indian Rupee deprecating against USD so earlier investments providing higher returns.
Motilal Oswal is a fund house:
https://www.motilaloswalmf.com/mutual-funds/motilal-oswal-nasdaq-100-fund-of-fund
It is a bubble, but ……
I sit out bubbles because I recognize them but know I never know how to get out in time. But I do know some who succeed in riding the wave while still coming out the other side
I went 30% into international funds after the first recovery from Donald’s tariffs in spring 2025, when it became abundantly clear that our former trading partners were all hammering out new trade agreements. (Which take 1.5 - 2 years to take effect, but eventually they will and it’ll affect the US adversely.)
Been meaning to rebalance into money markets and bonds with how crazy this year’s been. This just makes me want to do that faster.