While everyone is celebrating last 2 years of stunning gains in US stock market.....there is lot to be concerned and worrying going forward.....
From any measurement US stock market is " the-most overvalued in the world"
US combined PE is a shocking 25.69
Canada combined PE is 18.21
China combined PE is 8.87
By the way, average PE of US in last 20 years has been 16.15.....
Currently in USA IT PE is 38.12......
Even in PEAK of Y2K bubble.....highest combined PE was around 24......vs current 25.69
To say the least.....
Current euphoria & frenzy has to come down in a hurry......
I am expecting an extremely tough 2025....where Indices may not exceed 4% gain and that too by end of 2025.......
First half of 2025 could be down 12%.......
Never mind all the hoopla of ......
Trump
AI
Quantum
Musk
Everything has been played out & priced IN......
Wall Street fools too many people quite often.....& everyone becomes a genius until they start losing hard earned money......
YES.....I will be reducing my exposure to only 25%....
That exposure may be to overweight in GDXJ & Bitcoin.....2 area to hide until all the froth is GONE....In case you have not noticed Ethereum or any other Crypto currencies have not made any new highs...only Bitcoin seems to be working......and making new all time highs.....
Bottom line....please pay attention to " current frothy sentiment "
Cannot last too long.....
Always be afraid of Wall Street antics, they keep reinventing " bubble under new packaging "
PE matters.....
Even AI has not shown any real impact yet...after 2 full years.....
Search is still very " tedious "
Too much AI fluff being highlighted as progress......
NVDA has turned south
TSLA could be next.....
AMD is @ lowest point.....
All this is a telltale of things " changing RAPIDLY "
All I can say....
Good luck to all OPTIMISTIC & FEARLESS traders......
Maybe its time to hit.....ULTRA CONSERVATIVE exposure
No more than 25%.....
Cash is always KING !!!!
Good luck with your own thesis about market & exposure......
BLOG does NOT give buy or sell.
PS.....I am going on a quiet period for @ least 6 months.....
Last week Down 6.93%
YTD UP 67.63%
Saleem
5 comments:
Hi Salem,
Thank you for all the valuable information! Have a Merry Christmas & a Happiest New Year you and your family!
And to Stocktrader as well!
Hi Saleem,
Thanks for your read on the markets. I appreciate your research and thoughts of the markets moving forward. This is valuable information. I have watched Youbube on different topics and they all predicted markets will drive further on positive note. I agreed with you that markets are in overbought territories and need to readjust before moving up further.
Merry Christmas & Happy New Year to you and your family!
Michael
Hi Saleem,
What does a "quiet period" mean? no more blogs?
I just got back from more doctor's appointments this morning - will be working up my numbers shortly but definitely felt the decline of the indices last week.
Stocktrader
Praying everything ok with you Salem🙏
Please keep us update and hopefully Stocktrader continues with the blogs🙏
Dear Saleem,
Hope everything is fine with you.
Thinking of you and praying for you
Joe
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