Earlier this week I posted an article discussing signs of “market exuberance” which including a link to a Neil Irwin, NYT, article entitled “Welcome To The Everything Boom.” The article is well worth reading, but Neil asks the right questions.
“‘We’re in a world where there are very few unambiguously cheap assets,’ said Russ Koesterich, chief investment strategist at BlackRock. ‘If you ask me to give you the one big bargain out there, I’m not sure there is one.’
But frustrating as the situation can be for investors hoping for better returns, the bigger question for the global economy is what happens next. How long will this low-return environment last? And what risks are being created that might be realized only if and when the Everything Boom ends?”
This weekend’s reading list of “5 Things” is a point/counter point focused on this central idea of the “everything boom.” Bubbles are a very interesting phenomenon. When“bubbles” are seen they do not exist, when disbelieved they burst.
Therefore, is the “everything boom” a realization of economic nirvana, or is it the next financial “bubble” quietly waiting to be ignored so that it “pop?”
1) Another Sign The Bull Market Is Nearing Its End? By Mark Hulbert via WSJ MarketWatch
“Here’s another sign the bull market in stocks may be nearing an end: Companies have dramatically reduced share repurchases.
New stock buybacks fell to $23.2 billion in June, the lowest level in a year and a half, according to fund tracker TrimTabs Investment Research. In May, the total was just $24.8 billion, and the monthly average in 2013 was $56 billion.
That’s worrisome, according to TrimTabs CEO David Santschi, because ‘buyback volume has a high positive correlation with stock prices.’â€
