This ALWAYS Happens Before A Stock Market Crash
In a Nutshell
The stock market is in a parabolic meltup phase with S&P 500 valuations (Shiller PE near dot-com peaks, top 10 stocks at 40%) signaling highest risk since 2021, mirroring Japan's 1989 bubble and 1929 crash setups amid declining birth rates, high debt, and circular AI investments. Counterarguments highlight stronger earnings (P/E at 28 vs. 65 in 2001), Magnificent 7 dominance, and poor cash alternatives, with Fidelity noting AI adoption could drive further gains unless cash burn, inter-company ownership, or rising rates trigger collapse. Advice: Stay diversified (US/international stocks + 20% treasuries), dollar-cost average, hold cash for 30-50% crashes, as markets can stay irrational longer than you can stay solvent.
These notes were generated by AI and may contain inaccuracies.
According to Peter Granditch, we are now in the parabolic meltup phase. When and where it peaks is anyone's guess. It's the exit phase, not enter. Better to be a year too early than a day too late. Year-over-year, the S&P 500 is up another 30%. Schiller PE ratios reached its second highest level ever, only slightly behind the dot-com bubble. Concentration peaks show AI near the same point as 2001 tech stocks and the Japanese everything bubble. Risk is the highest it's been since 2021.
Discussing what's going on objectively, what the data says, why risk is highest since 2021, and if we should be concerned. Tired of highly scripted edited videos; preferring laid-back approach. If you appreciate this, hit like, subscribe. Big thank you to Incogn for sponsoring.
Stock market makes no logical sense. Unresolved conflict in Middle East, gas prices through the roof, everyday living expenses skyrocketing, yet S&P 500 keeps moving higher. Comparisons to United States in 1929 Great Depression. Chart of 1920s blended with last 30 years shows confirmation of final stages of great meltup before crash. Japan everything bubble from 1970-1989: stock market increased >22% a year, turned into one of greatest financial disasters. S&P 500 tracking Japan's path perfectly if updated for today.
Japan's bubble caused by cheap interest rates flooding economy with inexpensive money, leading to more stock market investment, higher land values, borrowing against land to invest more, creating a loop for almost two decades while seen as new normal. In 1989, market fell 50%. Due to shrinking workforce, higher government spending, increasing taxes, economy didn't fully recover for almost 40 years.
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