How come Wall Street can be at record highs in the midst of a world wide pandemic?

[Shiny Things]

Dow Jones is almost 30 000 now.

10 years ago, it was about 10 000.

Almost 3 times increase over 10 years !

Same for the S&P.

How to explain that?

...I don’t understand what you’re asking. What are you expecting people to explain?

 

[greentiger]

...I don’t understand what you’re asking. What are you expecting people to explain?

How can shares prices in US market now be worth three times that 10 years ago?

How can 1 dollar 10 years ago become 3 dollars now.

Possible or not?

Or is it due to some financial engineering.

 

[limster]

How can shares prices in US market now be worth three times that 10 years ago?

How can 1 dollar 10 years ago become 3 dollars now.

I can say the same thing about chicken rice. The chicken and rice amount seems the same, how come increased in price?

 

[greentiger]

STI now and 10 years ago roughly around the same level only.

 

[reddevil0728]

STI now and 10 years ago roughly around the same level only.

Did you factor in dividends paid out?

 

[greentiger]

Did you factor in dividends paid out?

No.

But shouldn't affect much.

 

[greentiger]

I can say the same thing about chicken rice. The chicken and rice amount seems the same, how come increased in price?

Chicken rice price go up 3 times in 10 years?

Unless banana money.

 

[reddevil0728]

No.

But shouldn't affect much.

Really? I thought if dividend yield has been increasing I think prior to the pandemic around 4%? Had companies don’t pay as much in dividends, the price would technically have been higher no?

 

[greentiger]

If you watch CNBC, it is always terms like undervalued and this company is a buy etc.

 

[greentiger]

Really? I thought if dividend yield has been increasing I think prior to the pandemic around 4%? Had companies don’t pay as much in dividends, the price would technically have been higher no?

Because dividends affect both US and Singapore companies equally.

 

[reddevil0728]

Because dividends affect both US and Singapore companies equally.

Yea but we are not comparing other markets ma.

You are comparing sti now and 10 years ago.

 

[limster]

Chicken rice price go up 3 times in 10 years?

Unless banana money.

Shiller PE (or CAPE) went from about 21 in 2010 to 32 in 2020, thats about a 50% increase. Equivalent to chicken rice increasing from $2 to $3

And as you can see at the extreme left of the chart, there was a time when the Shiller PE was even higher...

 

[hwmook]

Dow Jones is almost 30 000 now.

10 years ago, it was about 10 000.

Almost 3 times increase over 10 years !

Same for the S&P.

How to explain that?

STI now and 10 years ago roughly around the same level only.

This is how you value companies? Continue to underperform then.

 

[chrisloh65]

You can look at the money supply of USD, that could perhaps give you a hint?

How can shares prices in US market now be worth three times that 10 years ago?

How can 1 dollar 10 years ago become 3 dollars now.

Possible or not?

Or is it due to some financial engineering.

 

[greentiger]

This is how you value companies? Continue to underperform then.

I have to admit I am not an economics or financial expert.

Learn on the job type.

Maybe you can explain why US stocks are worth so much?

 

[greentiger]

You can look at the money supply of USD, that could perhaps give you a hint?

So when will that signal a reverse?

 

[greentiger]

In the early 30s, the US stock market fell by almost 90%.

Will it happen again?

Unlikely but 50% fall is definitely possible.

That will bring Dow Jones to about 15 000, which is still high.

 

[chrisloh65]

I can't see any signal that USD money supply will reverse fundamentally, and so US stocks will have limited upside but significant downside from here

So when will that signal a reverse?

 

[Mecisteus]

I can't see any signal that USD money supply will reverse fundamentally, and so US stocks will have limited upside but significant downside from here

Uncle you have been telling us the same story since 2018.

10 years later when DOW reaches 50k, you will still be singing the same tune.

 

[chopra]

Reasons:
Massive money printing $$$
Super low interest rate (almost 0% - Negative in Europe!)

And yes, US shares grossly over-valued! But the bubble may continue to grow until it burst (finally)!

this one.

second that