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Bubble

Next bubble popEach time that the cost of money increments, the bubble of the moment pops. If you check carefully, the parallel channel's upper bands (yellow ones) play the trend resistance role. If those bands are touched, I can reasonably assure that the FED will intervene in the bond market with Yield Curve Control (you don't want to have the biggest economy of the world be insolvent). The intensity of their intervention will depend on the slope of the recent spike. If the previous description occurs, the only indicator left that we will have for checking the debt market's actual economic reality is the 30-year yield. It is highly improbable that the central banks intervene those yields due to the distance in the final payment. Any thoughts or opinions are more than welcome.
TVC:TNX
by LiquidityMaster
1
Crypto currency: "The Digital Tulip"?📌 During the last five months, the price of Bitcoin increased more than five times - from $10,000 to over $60,000 while the global crypto currency market capitalization topped $1.7 trillion. When it comes to traditional assets, such a rapid rise in the value of an asset typically indicates the emergence of a financial bubble. But, what about crypto currencies? 📌 Against the tsunami of crypto currencies' market capitalization increase, financial bubbles of the past look like small and mid-size waves, historically adding 40 to 440 percent to the asset value. The value of global crypto currency markets increased almost 900% from March 2020 to today. 📌 When do bubbles usually reach their peaks? In looking at past bubbles, the longest time period is four years with an elongated period experienced by the real assets markets. If the crypto currency bubble is compared with digital asset bubbles, like the Dotcom and Biotech bubbles, it may peak 13-21 months after the bubble started to blow or between March and December 2021. Is this time different? Super-easy monetary policy and expansionary fiscal policies in the US and around the world coupled with the accessibility of financial instruments and stock exchanges for a wide range of non-professional investors may make this "digital tulip" bubble different than bubbles of the past. These factors make it more difficult to predict how much the peak value of Bitcoin and other crypto currencies can exceed their fundamental price levels defined by the cost of coin mining and infrastructure maintenance. We are expecting a Bubble crash in Crypto Market..💭 What's your views and Thoughts 💭 Please feel free to describe below.
BITSTAMP:BTCUSD
by Ridethemacro
2
Tesla buy or sell? Bubble?Reasons to buy Tsla Although electric cars occupy a small portion of the global automobile market, Tesla has acquired a large market share within this niche segment. Tesla has a little less then 1% marketshare worldwide which is impressive for a young car company like Tesla. Especially in the electric segment where it has 16% marketshare in 2019. The company has a strong performance adn the unique design helps the sales. For example the preorder of the Tesla Truck. Also the solar and storage deployments will probably witness significant growth aided by the positive reception of the Megapack and Powerwall products. The delivery of Model 3 has risen significantly, which counts for a big part of the companies overall deliveries since it the best selling car of Tesla so far. Besides Model 3, Model Y is also improving Tesla’s prospects. The construction progress for Gigafactory 4 in Berlin and Gigafactory 5 in Austin are also underway, with production from both plants expected to start this year. With China being the biggest EV market, Tesla’s ambitious production plans in the country bode well. Robust production of Model 3 from the new Gigafactory in Shanghai bode well for its future growth. The Shanghai factory is ramping up well and commands a higher market share in the Chinese EV market. Over a multi-year horizon, Tesla anticipates achieving 50% average annual growth in vehicle deliveries. Meanwhile, low leverage of Tesla offers financial flexibility. Notably, its long-term debt-to-capital ratio stands at 0.31, lower than its industry's 0.54. Historically, from 2016 to 2020 sales of TSLA increased in average of 45% from one year to another, with an estimate of 49% sales growth for 2021 and 33% for 2022. The liquidity and Solvency of Tesla are both scoring good which means Tesla is able to pay of short term as long term obligations. Reasons to sell Tesla inc The company’s high R&D and SG&A costs do raise concerns. During the last reported quarter, R&D and SG&A costs were up both yearly and sequentially. Capex soared 138% year over year and is likely to increase this year as well, thereby affecting cash flow and margins. Tesla's excessive reliance on credit sales remain a concern. In 2020, Tesla posted a net GAAP income of $721 million. Without the regulatory credit sales, the firm would have incurred a loss to the tune of $859 million. Stretched valuation of Tesla is a concern. Going by the EV/EBITDA multiple, which is often used to value auto stocks, Tesla is currently trading at a trailing 12-month EV/EBITDA multiple of 187.9, considerably higher than the industry average of 52.41. The firm’s P/S ratio of 17.3 also compares unfavorably to the industry’s 3.05. Tesla bubble? Based on the future outlook of the industry and the company and considering all the discussion around TSLA bubble, it can be assessed which will be the fair value for the company at the moment. For this, the EPS reported for last quarter was taken and annualised which gives us 0,96$ per share. Based on recent developement and estimation, it is forecasted that Tesla will have an annual growth in earnings of 40% each year, first 5 years and 10% from year 6 to year 15. For safety reason 15 years is the number of years we will calculate with as there is a reasonable time to recover an investment. The forecasted EPS after 15 years based on this growth is around 12,17$ per share. Multiplying these with a decent P/E ratio of 35, the fair price would be currently below 500$, while the real price is just under 800$. Buy or not? Although it is clear that the company is the market leader and may outperform without problem any other company from the industry for the never ending future, however, following value investing principles, the current price is out of real position and may lead to the fact that the stock is overvalued. Thus, the stock may face a corrective action in the near future. However, it is a bit funny to observe that even in a period of instability and uncertainty and in this Covid-19 situation, where people use the cars a lot less, Tesla kept it's position, and even increased its position, without recording great losses. This could mean that value trading as we know, may not be applicable anymore and the investors should adjust and adapt trading principles and behaviours accordingly. If you are a value investor, like I am, then Tesla is not the right choice to invest in.
NASDAQ:TSLA
by Sharona_vf
How Big is the Tech Bubble?A ratio chart divides the value of the Nasdaq 100 by the value of (S&P 500+Dow 30+Russell 2000). The large spike in the blue line to the left illustrates how the NQ became so overvalued in relation to the S&P, the Dow, and the Russell. If the ratio pulls back, I would say it may find its balance around the lower red line, after retracing the recent parabolic spike like it did in 2000. I think it will keep going higher. I think the high prices of tech stocks are more legitimate this time around. I believe I just made a "this time is different" type of comment lol. Thoughts?
TVC:NDQ
by The_Arena_Trader
4
Why it is so funny when bitcoin holders get mad at bearsIt is not just because as Buffett said they are not investing but gambling. It is much more ironic than this. Bitcoin has been going not just back to zero but even BELOW zero every time. And people still cheer. Compare this to: Meanwhile the crypto... If it drops they will say they do not care they're in for the long run. And I believe them. If it goes up then drops they will say they do not care it went up so much they were in the green. And I believe them. It's obvious why we believe them. Because they are noobs. The price goes up they will snatch profit instantly. The price goes down they will hold on forever. Nothing new. They did not invent this. Every terrible investor has been doing the same forever. GME had only buyers, then Citadel data shows the buyers stopped coming, and when they were all in, it dropped back to the zero line and beyond (below where it started). It is the same thing for short sellers, that had their fun for long. Melvin took one for the team. Today, 5 years later, Bitcoin is only just at the 2016 trendline. And you know it would be much more fun for bulls to be testing it from above after evil shorts sold than from below after they went all in. Even if BTC goes to 100k it won't be far above the TL, and I bet it will drop below soon enough. The price is arbitrary it's only what buyers and sellers are agreeing on. There is no hard limit up or down (remember Oil?). When the price trends, in a rational market, buyers agree more to buy around the trendline/fundamental value/support, and sellers are getting more open to the idea of selling when the price is far from the trendline. So yes, Bitcoin could be at 2 million today. Although at some point people would cash out and retire. It would be higher than 50k that I am certain of. So each time you see Bitcoin holders celebrate or get angry at sellers, remember to laugh.
by MrRenev
10
WTI - Crude Oil - USOILWEST TEXAS INTERMEDIATE Fundamental Perspective - Oil's bullish rally has been primarily driven by succesful moves from OPEC and its allies, combined with an overenthusiastic market that could be getting ahead of itself. Vaccination programs and efforts are being implemented on a global( ish ) scale, but we are still very far from a global economic revcovery, or even a global economy back to pre-pandemic levels. Oil prices are as high as they were before the pandemic was even in sight, while Demand for it is not even close to prepandemic levels. Yes, China's oil demand has rebounded rapidly, but that's not exactly the case throughout the rest of the globe. Technical Analysis Perspective - When looking at the Weekly timeframe we can observe that the last bearish push broke all the previous Lows (White Squares). In the event of Oil (Crude AND Brent) having a drastic fall in the coming weeks, it would probably be accompanied by a portion of the market. ***In the event of Saudi Arabia and OPEC+ further tightening the Oil Supply, the commodity's price would likely keep rising and eventually break through our Supply Range. Although the real question would then be: How long can this artificial scenario be sustained until there are adverse effects in the economy? (Ex. Transportation costs rising for/forcing out businesses that were already hit by the pandemic).
TVC:USOIL
by joseafab
1
Calling Tops is Virtually Impossible, but Here Goes!After nearly a decade, I believe the outright manic outperformance of tech stocks over commodities came to an end this past week! Does this mean that the prices of shares in tech companies will fall or even crash? No. It simply means that commodities and the shares of commodity producing companies will outperform them over the coming years... The cost of hedging inflation is about to skyrocket, make sure you are positioned accordingly...
TVC:NDQShort
by UnknownUnicorn4195243
1