Ask HN: Why are the stock valuations so detached from reality?
As the title says, why do you think the stock market is (or is hovering) around the all time high levels when the underlying economic indicators are clearly showing the future isn't that bright after all?
I know some will say "it's a bubble", that's fine but why is the bubble growing and what do you think is different from the dot com bubble for example.
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8 comments
| 3 points
| on HN
)
1. Valuation is based on hopes for future returns, not on current situation.
2. Central banks pumped trillions of dollars, euros, and so on for the last decade. The way they did it was beneficial to investors and less to consumers. So, given endless amount of money and without much of a growth, investors decided to put them wherever possible with shares being an obvious choice.
First one is generally also true. But future returns with the current stock levels? Or maybe everyone is going short term, trying to ride the wave as long as possible and hoping to be out before the next drop?
Additionally, I've seen mentioned as factors companies like Robinhood which let random people invest in a user-friendly manner. I don't have much data on them though.
As to Robinhood and Revolut (which is another similar platform), I wonder as well, how much effect they have on the stock markets wild run....
https://www.reddit.com/r/investing/comments/iz5lvq/the_stock...