Comment by crinkly
2 days ago
WSJ are pushing it there. Depends what you mean by dominance. The US market is propped up on hyped big tech investments with little chance of ROI for shareholders other than inflating the valuations. PE ratio is quite frankly bananas too.
At some point it’s going to be absolute carnage. Private investment companies have already seen the end game and from direct observation have been pushing the hype to drive volume so they can shift their holdings on to the bagholders.
Good luck. It’s not a stable market. It’s fucked.
Yes go most banks in Europe and ask to invest anywhere from 1000 to 1M euros they will sell you mainly two things: European govs debt and bluship US tech stocks. It might be wrapped in all kind product but it is often most of it (MS, Apple, Google, Nvidia, etc.).
I once asked what could be the alternative they literally couldn't answer me. Virtually every EU citizen with a bit of money has part of their savings invested in the same 5 US big tech companies. And I am sure it is the same in many parts of the world.
We are very very far from initial role of a bank and you might wonder why Europe has its own banking system in the end. It also explains why the price of those stocks are so high.
> Virtually every EU citizen with a bit of money has part of their savings invested in the same 5 US big tech companies. And I am sure it is the same in many parts of the world.
Consolidation of power means that’s just what happens when you chuck money into an index fund, even a global one.
Actually you must be thinking of the most reputable banks.
Because most of them will absolutely try to fleece their older customer demographic by trying to make them invest in high expense funds that perform terribly. For them to advice you to put them into a decent index tracking fund is already a good sign.
That’s idiotic really. I mean I’m not sure why you’d go to a European bank for investment advice other than “bank do money, ug”. There’s a whole advisory market out there which gives you better options based on your attitude to risk profile and goals. Not the usual put it all in a TSLA/NVDA/MSFT ETF and to the moon shit.
I made more out of the tech market in the last 5 years than I would have in it by having sensible advice and a half decent financial model.
I agree with you that tech stocks are overvalued. However, there is no free cake that I can think of. You can invest in bonds but in the short to medium term they under perform compared to equities by a lot. And most industries have their own risk profiles that if anything are more tangible than the notion that someday, the tech bubble will pop.
The older generations (Boomers, Gen X) who have most of the money still invest through well known banks and often get advise from the local branch. Their money will either disappear one day or stay there until their death.
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The US market is propped up by the most powerful military that has ever existed, and its exists purely to maintain the US hegemony.
Tech sector dominance/hype is a nice perk.
I don't know who is downvoting this post. The fact that companies such as Tesla as being featured as meme stocks for years, with valuations that bear no relationship to performance let alone fundamentais, is a clear indicator that the house of cards can tip at any moment.
The foundation of that house of cards is composed of nuclear weapons, stealth bombers, nuclear subs, and aircraft carriers.
Multiple branches of the US government regularly go after business for having too high of a profit margin. I really don't blame businesses for holding onto their cash, instead of making stock disbursments, when that's exactly what they are incentivized to do.
I really wish they’d ban stock buybacks. When executives get paid in stock options, they want the stock price as high as possible. The easiest way? Buy back shares to make the remaining ones worth more.
But when companies do this while their stock is overpriced, they’re wasting shareholder money on expensive shares. Executives pad their own pockets while shareholders get screwed.
I’d rather see companies pay better dividends or keep the cash. At least then shareholders actually benefit instead of just watching executives get richer.
That happens because of a Clinton administration regulation that was meant to reduce executive pay, but instead incentivized raising it: https://www.propublica.org/article/the-executive-pay-cap-tha...