[2014] What's the next stock market bubble?

[WaikikiFirst]

That PWR one makes me laugh. I bought it 4.5 yrs ago. V good company. Then, it turned into "an AI stock". It outperformed Gold by more than 3x in the last 5 yrs. (the ratio was 31- 32, now it is 9.7) Since I have almost a 500% gain in PWR, that makes sense given that Carolinian was talking about a 150% gain in Gold I think

 

[Carolinian]

Now Jamie Dimon, CEO of JPMorganChase has been quoted as saying gold can "easily go to $5,000 or $10,000," and he has not historically been a fan of gold. J.P. Morgan himself once said "gold is money, everything else is credit".

For those into stocks who do not want to hold metal, another way to play this is gold and silver mining stocks.

UPDATE - silver went over $54 today and gold is a few cents short of $4,300. right now.

 

[Carolinian]

13 Reasons Why Gold Has Outperformed Stocks Since 2000

The recent increase in gold prices in the United States and around the world has been driven by a confluence of economic, financial, and political factors. This environment, where gold has outpe

www.realclearmarkets.com

 

[DrQ]

PayPal’s crypto partner mints a whopping $300 trillion worth of stablecoins in ‘technical error’​

• Paxos mistakenly minted the stablecoins as part of an internal transfer, before it “immediately identified the error and burned the excess PYUSD,” the company said in a social media statement.
• There aren’t enough dollars in global circulation to back $300 trillion PYUSD, which would theoretically require more than double the world’s estimated total GDP.

 

[Brett]

Trapped in the Bubble !

https://www.longtermtrends.net/stocks-vs-gold-comparison/

.

 

[Carolinian]

 

[Brett]

https://www.washingtonpost.com/business/2025/09/17/401k-millionaires-saver-types/

Slow and steady strategy
makes many millionaires


Patience and a well diversified portfolio of stocks and bonds are far more likely to reward you


The number of fidelity Investments 401(k) accounts with $1 million or more hit an all-time high of 595,000 in the second quarter of this year,
according to the company. Year over-year, the number of 401(k) millionaires increased by nearly 20 percent. While these figures reflect only the accounts managed by fidelity, other retirement plan administrators have reported similar trends. These workers have saved and invested for nearly three decades on average. They invest regardless of whether the stock market is up or down. They patiently wait to reap a return that will allow them to retire comfortably

 

[Carolinian]

I'd rather be a real estate millionaire, which, in fact, I am. Residential rental properties also provide great income and it is based on holding a hard asset..

In 2020, we only had fairly small silver holdings and a couple of gold coins. We started acquiring more about the same time the central banks did. That has also proven a good strategy as the whales who do most of the buying (and selling) in the gold markets are the central banks. They started a buying spree in 2020 and it not likely to stop because they distrust all of the debt laden fiat currencies of other major countries and gold is the only game in town to get around that. It will continue to be until one or more major countries get their debt under control which does not seem likely any time soon.

Looking back 5 years, the period in which central banks have been gradually dumping all major fiat currencies and accumulating gold, here are the results of what market prices have done:

Gold up 180.93%

Dow Jones up 59.18%
S&P 500 up 103.48%

 

[Brett]

https://www.wsj.com/finance/stocks/...e-stock-market-342b2ec0?mod=finance_lead_pos4

 

[emeryjre]

I'd rather be a real estate millionaire, which, in fact, I am. Residential rental properties also provide great income and it is based on holding a hard asset..

In 2020, we only had fairly small silver holdings and a couple of gold coins. We started acquiring more about the same time the central banks did. That has also proven a good strategy as the whales who do most of the buying (and selling) in the gold markets are the central banks. They started a buying spree in 2020 and it not likely to stop because they distrust all of the debt laden fiat currencies of other major countries and gold is the only game in town to get around that. It will continue to be until one or more major countries get their debt under control which does not seem likely any time soon.

Looking back 5 years, the period in which central banks have been gradually dumping all major fiat currencies and accumulating gold, here are the results of what market prices have done:

Gold up 180.93%

Dow Jones up 59.18%
S&P 500 up 103.48%

Aren’t you the same person who was complaining a while back because your Medicare cost withheld from your Social Security was going up because your income had gone up
Or was that someone else

 

[Ralph Sir Edward]

For everything there is a season. . . even every sort of investment. I am going to break up the chart that Brett repeats over and over, into periods of investment changes.

1975 to Date

This date was not chosen at random - Jan 01 1975 was the first date that gold could be owned in the US without government approval.
Overall rate was stock +6500% - gold 2300%. Of course for this period to matter you would have to be at least 70 years old and most likely more.

Now we will break this period into sub periods.First 1975 to Feb 1980.

Overall rate for the period. Stocks 20% - gold 250%. Advantage gold for this period.

The next period is Feb 1980 to Jan 2000.

Overall rate is stocks +1150% - gold -64%. Stocks outperformed gold by +3200%.
A unique period, where stock out performed everything, due to the revaluation of financial assets with the ending to the great US inflation.
There's been nothing like it before or since. But it only mattered if you were around and investing at that time - i.e. you have to have been
over 65 for this whole period to apply, and over 50 (as of now) for it to apply at all.
To get a feel for it, the stock-to-GDP ratio went from 40% to 130% over that period, or 3 fold.

The next big period is Jan 2000 to date.

Overall rate is Stocks +320 - Gold +1080%
Gold outperformed stocks 3 fold over this period.
But let's break this period up.

First, Feb 2000 to Feb 2012.

Overall rate Stocks 70% - Gold 475%. Roughly 6X better performance for gold.

Next Feb 2012 to Dec 2019.

Overall rate Stocks +120 - Gold -15% Net advantage to stock by around 150%

Finally Dec 2019 to date.

Overall advantage - Stocks +60% - Gold +160%. Net advantage is to gold - +100%.

Summary. If you look at the stock gain vis-a-vis gold, you find that all that gain was in one period 1980 to 2000, when inflation
cranked down from 18% to 3-4%, inflation which had caused stock to drop in real value (as opposed to nominal value) for the 15 year before 1980.
(This the very period that made Warren Buffet and Charlie Munger look so good for so long.)

Q.E.D.

 

[Brett]

Aren’t you the same person who was complaining a while back because your Medicare cost withheld from your Social Security was going up because your income had gone up

Yes! -
But even millionaires need help with health care costs. --- Just sell a few gold coins from the hidden basement stash )

.

.

 

[Carolinian]

Ralph - great post. What is significant about the period from 2020 to present is that during this period the world's central banks started accumulating gold and dumping the dollar and other fiat currencies. The central banks are the large scale buyers of gold. They have dumped euros, yen, pounds, yuan. etc. to buy gold. Given the fact that the issuers all of the major fiat currencies have barely sustainable, and some would argue, unsustainable debt, means that is not likely to change any time soon.

 

[easyrider]

Now Jamie Dimon, CEO of JPMorganChase has been quoted as saying gold can "easily go to $5,000 or $10,000," and he has not historically been a fan of gold. J.P. Morgan himself once said "gold is money, everything else is credit".

For those into stocks who do not want to hold metal, another way to play this is gold and silver mining stocks.

UPDATE - silver went over $54 today and gold is a few cents short of $4,300. right now.

Silver could really explode in price. Everything is in place for a huge price increase.

Bill

"I've Never Seen Anything Like This": One Bullion Dealer Sees A Rupture In Gold And Silver Markets | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

 

[Brett]

 

[Carolinian]

Silver could really explode in price. Everything is in place for a huge price increase. Bill

"I've Never Seen Anything Like This": One Bullion Dealer Sees A Rupture In Gold And Silver Markets | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

The recent surge in silver apparently had its origins in India, where citizens often store their wealth in gold and silver, and the price of gold has pushed more people toward silver. There is a particularly season in which demand peaks due to festivals and weddings, and this year, the supply ran dry. That led to a shortage of 1,000 ounce bars in the biggest silver market in London as Indian dealers reached out for more supply. That led to an explosion in rates to "lease" silver, which in turn impacted refiners, who use the lease mechanism in buying, refining, and selling silver. Now many of the refineries have stopped taking in new scrap silver to reprocess due to the very high leasing costs. It has become "the perfect storm" in the supply chain. What this will mean going forward is still not completely clear. However, the silver market has changed. For several years past and projected quite a few years in the future, silver demand significantly exceeds mine supply, which points to a very bullish supply / demand curve for silver. On top of that, the latest figures show industrial demand accounts for 80% of silver demand. Not too many years ago, that was 30%. Silver is not only a precious metal. It is a commodity that you can take and hold physical possession of.

 

[Brett]

https://www.wsj.com/finance/stocks/...nst-an-ai-bust-ef80e6de?mod=finance_lead_pos2


Shares of big technology and chip companies contributed to a monster rally that helped lift stocks out of April’s turmoil to dozens of new records. Now, worries about the potential return on a new series of multibillion-dollar investments between the major players have some wondering if the stocks have run up too far, too fast. That has some investors looking to cushion their portfolios in case the artificial-intelligence boom turns into a bust.


Healthcare stocks
Some analysts suggest investors look at traditional havens, like healthcare shares.
Healthcare stocks are known to hold up during times of economic turmoil, when people tend to give priority to spending on necessities over discretionary purchases. Many of these companies also pay robust dividends, offering investors a steady source of cash.

International shares
Another place investors have sheltered from tariff turmoil and U.S. economic worries recently is international markets. Some think those are
also good places to reduce exposure to AI because many of the red-hot AI companies are U.S.-listed


Over the past 15 years, U.S. stocks’ total return has trounced the rest of the developed world by nearly 500 percentage points.

 

[Ralph Sir Edward]

View attachment 117345

View attachment 117346

https://www.wsj.com/finance/stocks/...nst-an-ai-bust-ef80e6de?mod=finance_lead_pos2


Shares of big technology and chip companies contributed to a monster rally that helped lift stocks out of April’s turmoil to dozens of new records. Now, worries about the potential return on a new series of multibillion-dollar investments between the major players have some wondering if the stocks have run up too far, too fast. That has some investors looking to cushion their portfolios in case the artificial-intelligence boom turns into a bust.


Healthcare stocks
Some analysts suggest investors look at traditional havens, like healthcare shares.
Healthcare stocks are known to hold up during times of economic turmoil, when people tend to give priority to spending on necessities over discretionary purchases. Many of these companies also pay robust dividends, offering investors a steady source of cash.

International shares
Another place investors have sheltered from tariff turmoil and U.S. economic worries recently is international markets. Some think those are
also good places to reduce exposure to AI because many of the red-hot AI companies are U.S.-listed


Over the past 15 years, U.S. stocks’ total return has trounced the rest of the developed world by nearly 500 percentage points.

It's not an <if> the AI boom will turn to bust, it's when. It's a common pattern. A new civilization changing technology comes around and everybody want to get in "on the ground floor". That forms a bubble, which eventually pops, lead to a bust in which the vast majority of new companies in the business go broke and even the successful ones lose most of the value in the market. It occurred in the 1920's with automobiles and radios, it occurred in the 1960's with electronic companies, and in occurred in the 1990's with the internet companies.

It's occurring now with AI stocks, but the bust hasn't occurred yet. . .

 

[easyrider]

It's occurring now with AI stocks, but the bust hasn't occurred yet. .

The reasons I'm doubting a bust are there are mechanisms in place to monitor the situations, a plunge protection team and the Fed's ability to indirectly influence the markets with liquidity and interest rates. The biggest factor might be having a business person running America like a business instead of a charity, imo.

Bill

 

[Ralph Sir Edward]

The reasons I'm doubting a bust are there are mechanisms in place to monitor the situations, a plunge protection team and the Fed's ability to indirectly influence the markets with liquidity and interest rates. The biggest factor might be having a business person running America like a business instead of a charity, imo.

Bill

The four most expensive words in the English language . .

"This time it's different!"

 

[easyrider]

The four most expensive words in the English language . .

"This time it's different!"

Regarding the market it is different, it kind of is. The circuit breakers they use ensure trading is temporarily stopped in a sudden plunge. The plunge protection team then coordinates matters to slow the plunge. The Fed's role to influence the market is by lowering interest rates , buying bonds and increasing the money supply.

Even with all of this in place there is risk, so I absolutely get your point.

Bill

 

[Ralph Sir Edward]

Regarding the market it is different, it kind of is. The circuit breakers they use ensure trading is temporarily stopped in a sudden plunge. The plunge protection team then coordinates matters to slow the plunge. The Fed's role to influence the market is by lowering interest rates , buying bonds and increasing the money supply.

Even with all of this in place there is risk, so I absolutely get your point.

Bill

All those tools did not stop the NASDAQ from dropping 78% from the March 2001 high.

 

[WaikikiFirst]

occurred in the 1920's with automobiles and radios, it occurred in the 1960's with electronic companies, and in occurred in the 1990's with the internet companies.

Ask the wrong question. Get the wrong answer. Learn the wrong lesson.

 

[WaikikiFirst]

It's not an <if> the AI boom will turn to bust, it's when.

All the same people said the same thing 1 yr ago. They'll be right someday. Look how a bunch of carefully-picked "AI" stocks have done in the last yr

 

[WaikikiFirst]

Shares of big technology and chip companies contributed to a monster rally. ... worries about the potential return on a new series of multibillion-dollar investments between the major players have some wondering if the stocks have run up too far, too fast.

These exact 2 "thoughts" have been published by dozens of "thinkers" at about 7 different times over the last 2.5 yrs. Such fun.