I wonder. Investing is all about relative yield. If stocks return 0.5% and treasuries return -4%, stocks will sustain higher ratios than the historical mean.

But I’m putting my money where your mouth is and betting on a correction.

True but you are taking say a -30% loss risk for only 0.5% expected return. I don’t think any risk manager is going to be very comfortable with that risk/reward.

> -30% loss risk for only 0.5% expected return.

vs the alternative - a guaranteed loss of 4%?

And the expectation of only 0.5% return is only going to be short term. Long term recovery is a good bet imho.

Just use dynamic hedging, risks will be smaller.

Cash might have a similar risk (inflation).

Stock prices are forward looking - what do you expect the stock to do in the future.

That's how you end up with companies with negative net income having valuations in the billions.

Why? A lot of the value of a stock is ability to resell at a high price later. If everyone (including U.S. Fed and gov) agrees to continue to push prices high for the forseeable future, then it seems like prices can lose connection to e.g. ownership in a company.

That’s the definition of a bubble.

Yeah, it made me laugh that the OP stated it in such a matter-of-fact fashion, as if it’s normal or good.

If you're talking about me, I don't think it's normal or good! But I do think it's a matter of fact.

I agree, or pretty close. But it's not axiomatic that bubbles always pop (at least on the time span one expects).

> But it's not axiomatic that bubbles always pop

You can only call it a bubble once it pops. So therefore, it is axiomatic. This stock "bubble" might not pop, and hence, it might not be a bubble.

Your definition of bubble and the one I was replying to are fundamentally incompatible - I don’t really care which term one uses though