STRAIGHT TALK
MARK BARNES: Investment markets have undergone structural change
It just feels like stock markets are high. In fact, everything seems overpriced. Or is it just that the value of money is at an all-time low? Never mind the goal posts, maybe the field has moved? There are long cycles in play which drive investment currents and then there are the daily effects of so many variables and peoples and utterances to bear in mind, as we exercise our judgment as to whether things are cheap or expensive. But time always favours the big trends and the professionals always remind us to ignore the noise. I can’t. In the US (still the gorilla of the markets, for now), price: earnings multiples (inflation adjusted), while not at record highs are still pretty damn high! The only times they were higher were just before crashes. When, at the same time, bond prices are up and properties in many leading cities are looking unaffordable, if not bubblish, we have to ask whether there has been structural change.Explanations for all of this stuff will emerge soon after the...
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