Disclaimer:

Disclaimer: The blog posts and comments on this blog and posts on social networks are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is". The blog is stocks analysis and valuation, Bitcoin, Cryptocurrencies, Artificial Intelligence, AI, deep-learning focused. Independent, unbiased AI insights. Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blog posts on this blog and posts on social networks. Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blog post and posts on social networks! The blog is property of Wolfteam Ltd. www.wolfteamedge.com Respectfully yours, Petar Posledovich

Saturday, January 6, 2018

Tesla, Bitcoin, Stocks, S&P 500, Nasdaq. Bubbles?

Dear Reader,

2018 started with something like an euphoria in stock markets, especially US stocks.

Some say the financial markets are frothy - you have froth, many small bubbles. In tech stocks in 2000 and with real estate in 2007-2008 you had big bubbles - one in technology stocks and another in real estate.

This time it seems we have many small bubbles. However, taken together they form a very big bubble.

The stock markets, US stock indices especially are in the very early stages of a bubble. They keep going up constantly. One of the characteristics of a bubble is that there is a revolutionary technology which is going to change the world. Like the internet in 2000. The internet did transform our world, but the growth priced in some of the stocks back then was simply delusional. Now Tesla(electric cars) and Bitcoin(blockchain) fit the bill perfectly. Revolutionary technology that is going to change the world? Let's look at the facts. What have electric cars and blockchain changed up till now. Not much. Very few cars run on electricity. If you take out hybrids out of the occasion the numbers are tiny. If the government does not subsidize electric cars, without a breakthrough the industry will die. Blockchain harbours the promise to change financial transactions. But which banks have integrated it in their back offices. I do not now of one, So it must be that electric cars and blockchain have future potential. But they have been around for at least four years. When will that potential be realised?

So, in my opinion electric cars and bitcoin seem like bubbles. US stocks are in the early stages of a bubble. The price earnings multiples of US stock indices are near historic highs. But the bull run in US stocks, according to me will run for 2-3 years longer. What could trigger the next big crash in financial markets? I believe the triggers could be many. But the exchange traded funds industry could be key here. There has been stunning growth in the assets under management of the exchange traded funds(ETF) industry. The ETFs now manage more than 4 trillion USD. When the markets start falling the ETFs will start selling and this could exacerbate the fall dramatically.


Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!

Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost 
and posts on social networks(Twitter, LinkedIn etc.)!


Kind regards,
Petar Posledovich

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