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It’s Easy to Scream Stocks Bubble!

Stock-Markets / Stock Markets 2024 Mar 24, 2024 - 10:36 PM GMT

By: Stephen_McBride

Stock-Markets As I write, it’s currently the 15th anniversary of the 2009 stock market low.

In March '09, US stocks were trading at levels not seen since 1996. Investors had suffered more than a lost decade.

Fast-forward to today, and the S&P 500 has surged 650% off those generational lows.

It’s easy to look at the S&P’s 650% rise and scream “bubble!”


But revenues and profits determine stock prices over the long term. Since '09, S&P 500 companies’ earnings have surged 1,200%.

Let’s get after it…

  1. The “perfect” stock market indicator recently flashed red…

I’ve warned a stock market correction is likely looming.

No sign of one yet... but the latest cover of Barron’s magazine makes me even more cautious: bull horns thrusting with the headline, “Bet on the Bull.”



Source: Barron’s


For reasons I cover here, it usually pays to do the opposite of what financial magazine covers suggest.

Look, these journalists are just doing their jobs. They’re not investors. They’re just trying to sell subscriptions. And the best way to do that is to write about what’s hot.

US stocks have surged 25% over the past six months. That’s double the annual returns of the S&P 500 over the past decade.

It would be perfectly normal—and healthy—for stocks to take a breather after this monster move.

Don’t be surprised if the S&P 500 trades sideways until the summer, or even until November’s US presidential election.

  1. An urgent warning to all parents…

I believe smartphones and social media are harming our kids.

Suicide attempts are up. Depression is way up. The number of teen girls taking antidepressants has surged 130% since 2016.

My daughter is five. This makes me sick.

Tons of research shows the more time kids spend on phones, the more depressed and likely to contemplate suicide they are.

A new essay from top-notch research firm 13D Research & Strategy tells us why this is happening.

“How Does Technology Rewire the Intricate Circuitry of the Teenage Mind?” is a must-read piece if you have kids or grandkids… or even nieces and nephews.

I encourage you to read the whole thing, but here’s a quick summary.

Checking your phone triggers the stress hormone cortisol. Being constantly exposed to this stress hormone at a young age rewires minds, making it difficult to control the emotion centers in your brain.

This makes you far more likely to suffer from anxiety, feel unhappy, and want to harm yourself.

What to do:

#1: Do not buy a smartphone for your child.

Giving your kid an iPhone is like handing them a pack of cigarettes. It’s bad parenting.

If they need a phone, buy a flip phone that only calls and texts. You’ll be able to reach your kids, and their brains won’t be melted by Instagram.

Yes, this will make you an unpopular parent. Sometimes you have to choose between popularity and your kid’s well-being.

They’ll probably resent you in the moment. But long term, they’ll appreciate you did the right thing, even though it was harder.

#2: Lead by example.

Don’t tell your kids to stay off social media when you scroll through Facebook. Show them—with your actions—to avoid this toxic stuff. Here are five practical ways to do so.

Many people think government regulation is the solution. In Florida, a bill was sent to the senate recommending a ban on social media for kids under 16.

I worry this will only make it cooler to have a phone for “rebel” kids.

The change must come from the bottom up—from parents.

If you think I’m being harsh… you’re right.

We need to make it so socially unacceptable to hand teenagers iPhones that no parent would dare do it.

Here in Ireland, drunk driving used to be the “norm.” Today, you’d be ostracized and swiftly reported to child protection services for driving kids around with Guinness on your breath.

We must do the same for smartphones. The good news is parents’ groups in America and the UK are already moving in this direction.

  1. Today’s dose of optimism…

For decades, America was hooked on foreign energy to keep the lights on.

In 2005 alone, the US imported 3.7 billion barrels of oil, plus tons of natural gas and coal. It seemed hopeless.

Today, America produces more oil than any country in history.

America (blue line) is the only major nation that’s “energy independent,” as this chart shows:

Source: JPMorgan Asset Management

If Texas were a country, it would be the fourth-largest oil producer, eclipsing the whole of Europe.

It’s all thanks to the innovation of “fracking”—a process that releases oil and gas trapped deep down inside previously inaccessible areas.

America’s embrace of innovative new technologies is what keeps it #1. Never forget.

Stephen McBride

Chief Analyst, RiskHedge

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© 2024 Copyright Stephen McBride - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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