Investing in dross
It was interesting to note me old mucker Gareth Brown at Forager Funds observing recent speculative behavioural trends.
Like Gareth, I was but a young whippersnapper at the time of the tech wreck, although I can remember everyone from Uni students to factory chargehands talking about whether the FTSE 100 could reach ever reach 6,000 (it did, and then some, closing out calendar year 1999 at nearly 7,000!).
After the brutal crunch the UK's index remains well below those heady peaks more than 20 years later, in turn making valuations and earnings yields far more palatable today, certainly compared to what's going down in the U.S.
And we know that the U.S. is the proverbial elephant in the room, since it tends to drive the direction of global markets.
Gareth's poignant observation was that this time around we're a bit older, married, with kids, yet we both know middle-aged peers loading up their portfolio with total and utter dogshite (he mightn't have used that precise terminology, but I believe I've captured the spirit of it).
Bubble valuations
Just as there was no sustainable reason for stocks to be priced as they were in 1999, to the best of my knowledge the same holds true today.
Though I've heard 'you don't understand' and 'it's a different paradigm' more than a few times lately, partly with respect to speculative stocks which don't make profits, but actually in relation to all kinds of stuff.
This may or may not play out catastrophically, especially if and when inflation lifts, but I'm happy to be mostly on the sidelines at these levels.
Enough blabber, a smattering of germane charts...
One more...
OK, one other, which is a real ripper...
Alright, last one...
Lordy, reach for those returns!
