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Voluntary myopia?

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Why would I purchase an equity knowing the dividend will be low or non existent in the expectation of fair value in 6 to 12 months time, but pay the expected price now? Confused? It would appear P/E ratios no longer apply in this new normal freakfest that are current global indices, most especially the S&P 500 and DOW, which are frankly so removed from current reality as to be in need of professional therapy. It is voluntary myopia, a refusal to see what is in front of you and only accept what you want to be, and that becomes your reality. In the sixties people with long hair used to take hallucinogenics for that sort of effect, now one just has to trade in equities. It would appear there absolutely is no global health crisis, which will vanish sooner than it appeared and everything is much the same as last year and all the bad news is already priced in.........?????!!!?

What with the Fed buying junk(Ok, BB) bonds by the billion I suppose we can all pretend, even if we are nowhere nearer finding an end to this than we were in Feb. Remdesivir is not a cure, it merely encourages recovery for those who would recover anyway, chloroquine  has disappeared off the radar of great white hopes and we are still Quarters away from a proven effective vaccine. True the world is wearily returning to work, but those who think Q3/4 will be a return to normal have comprehensively failed to understand the nature of this Virus and its economic effects. Take a walk around your local town and see for yourself. For the markets to assume there will be no second wave is also risk indeed (naturally only with clients money). The bond markets, it seems are more cautious and expect a slower return to normalcy. Equity traders , it would appear do not. To return to the first point, why buy a stock, some already close to all time highs, in the expectation of price increase in the indeterminate future when earnings will be commensurately lower? Sounds like Bull logic morphing into BS logic.  It would be Kafka-esque, but as it's 2020, it is more Trump-esque. 

Happy trading.

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If you're the Fed and you're pumping the economy with cash, where are you going to spend it?  Buying stocks to keep rich people rich or spending it on infrastructure and development to help ordinary people into well-paid and secure jobs?

Wait, don't even answer that :D

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