Yah i get it. But i also know we had the 2nd greatest wipe out of all time in the past decade. The first one happened when rates were at 0%. So from my pt of view i don't really see another one coming.

As for your arguments about 2005-08 times. If you look back at those times the PE ratio were basically trading at 16-18. Then Fed cut rates in 07 and PE skyrocketed but so did the equity risk premia and therefore market had already topped out in 2007 and we got the "Fed pivot" crash. The time around we are already there at 18-19 PE levels. We just need Fed to cut rates and blow up the Erp. But Fed aint doing that coz it thinks job market is still strong and inflation is sticky. So they will hold those rates. Meaning a low PE will meet a low EPS somewhere down the line and then Fed will be forced to pivot. But i think it will be too late by then. The damage will be more severe by 2024.

I love you too.

So then it means a low PE ratio of below 18 will meet a low EPS somewhere down the line in range of 210-200.

What's going on there ?

Dude bond prices are +ve correlated with stock price. That means when bond go down i.e. bond yields go up then stock market should drop as well. This is what it means to be +ve correlated in high inflation which it clearly isn't rn.

And yes i agree gold was overbought af but so is stock man especially on the tech side.

As your friend Steve said " Paradigm shift takes time. People don't easily give up on their principles of investing " Hence i believe that one day market will come up to their senses that rates are actually at 5% (could go 6% if sticky inflation theory is correct) not 0%. That means something for equities valuations.

Thanks man.✌️

Yah man. season 2 has been horrible since middle. 😓 Opening episodes were great Oct 2nd week being the perfect bottom.

Now my only hope is finale doesn't disappoint. Thanks for still trusting me man. ✌️

3, 10, 23, 24, 23, 01

Yup looking at Ueda san past he wont let go YCC that easily. Although he will have to hike rates this year if Mr Kuroda doesn't hike in his last meeting.

Widening of Ycc to 75bps from 50bps is the safest bet you can play if none of the above happens.

Yah but it only works if inflation goes under 4% or sometime 5% and fall off the cliff which could happen in back half of 2023 as CPI major component is housing. I already discussed that "Barrons article" few letters ago.

"Bonds price will go up, stocks price will go down" eventually.

But before this happens i was discussing the theory for 1H 2023 where inflation might feel sticky and Fed could go beyond 5.1% Dec SEP projections. Another reason Japan. These both factors could push 10yr bond yields above 4% and cause rise in Erp.

How ? Isnt it pretty easy forward that Equity risk premia has gone to historic lows which is stopping markets from having a significant pullback or a bear mkt rally crash.

Correction : I wrote Mr Kuroda will widen the band on 10yr JGB from 25 to 50bps. It should be 50bps to 75bps.