PhD Chemist. Researching the economy & history of fluctuations in the stock markets. My opinions, not advice.
Joined August 2020
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q is a mean reverting metric. Bear market bottoms end with tobin’s q around 0.3, CAPE below 10. USA has an overvalued equity market and q = 1.41, CAPE 30, SP 500 @ 4057. If we drop to historical means q level = 0.75, CAPE = 17.3 that would leave SP 500 around 50% lower than now.
Shares Doctor retweeted
🇺🇸 S&P 500
The S&P 500 is trading at a Shiller CAPE level seen only during the market's most expensive episodes. History points to real annualized returns of between -3.8% and -1.4% over the next 10 years
👉isabelnet.com/?s=S%26P+500
h/t @LanceRoberts @michaellebowitz $spx #spx
Shares Doctor retweeted
I just heard a pundit on a financial media outlet here in the US express to their viewers that we are still in the early innings of this bull market.
Not only is that assessment wildly incorrect, but the pundit’s sentiment is eerily reminiscent of how Wall Street personalities communicated to their naive audience back in late 1999.
This is the most overvalued, over-concentrated, and over-leveraged market in history. If you believe that adding fresh long positions to stocks will result in higher prices a couple of years from now, you are setting yourself up for significant losses.
Source: Advisor Perspectives
Shares Doctor retweeted
Railroads were once 63% of the entire US stock market.
Not 63% of transport stocks. 63% of everything listed.
The history of concentration, in order:
– Tulips, 1637. A single bulb traded for the price of an Amsterdam canal house.
– South Sea Company, 1720. Shares went from about £128 in January to above £1,000 by summer, then back near £150 by December.
– US railroads, 1840s. 63% of US market cap.
– Utilities, telecom and industrials, 1929. 36%.
– Nifty Fifty, 1972. 40%.
– Japan, 1989. 44% of global equity.
– Dot com, 2000. 41%.
– AI Big 10, today. About 40%.
Every one of them was built on something real. Railroads did compress a continent. The internet did rewire commerce. Being right about the technology was never the thing that protected you.
The tulip story is also less clean than the legend. Modern research found the economic damage was modest and the ruin was mostly literary.
The bubble was never in the idea. It was in how many people decided to own the same idea at the same time.
Shares Doctor retweeted
YES - there is a Bubble. Largest Bubble ever!
And YES - it will burst.
And NO - there is no fancy code, which ensures, that market cannot drop 70-80%.
Shares Doctor retweeted
The first piece of the puzzle falls into place 🧩
Margin debt falls for the first time in weeks. This is notable as all prior bubble tops had the same occurrence. Markets topped, margin peaked, dropped, & then reasserted itself to a lower high.
Source: FINRA/Advisor Perspectives
Shares Doctor retweeted
One of the stock market's most important warning signs is getting louder.
Junk bond spreads and equities usually move together.
When they don't, pay attention.
CCC-rated spreads have been widening for eight months while the S&P 500 has continued climbing to new highs.
A similar divergence preceded the 2022 market peak.
Credit markets may be flashing a warning that stock market bulls can't afford to ignore.
See our analysis and outlook for stocks, gold & silver, forex, interest rates and more: ow.ly/X55n50ZBWlS
Shares Doctor retweeted
The U.S. National debt officially surpassed $40 Trillion yesterday.
Today the Treasury department announced a doubling of periodic purchases of long term U.S. Treasury bonds.
Shares Doctor retweeted
🚨 BOND MARKET CRISIS IS HITTING THE ENTIRE WORLD
The Bloomberg Global Long Bond Index yield has surged to around 4.2%, its highest level since July 2008.
Long term government borrowing costs are now back at levels last seen during the global financial crisis.
With governments carrying far more debt today, higher yields are making refinancing increasingly expensive.
This is becoming a major pressure point for global financial markets.
Shares Doctor retweeted
The S&P 500 just closed at a record.
That same week, the Treasury sold 30-year bonds at the highest yield since 2001. Investors now demand the most in a quarter century to fund the deficit.
Stocks are throwing a party. The bond market is sending the invoice. When financing the debt gets this expensive, the party has a clock on it. $SPY
Shares Doctor retweeted
The Fed started cutting rates in Sep 2024 with the 30-year Treasury yield below 4%.
They cut rates 175 bps and the 30-year yield is now at 5.3% (highest since 2007).
The Fed was done with inflation, but inflation wasn't done with the Fed.
Video: youtube.com/watch?v=f3ECfl1a…
Shares Doctor retweeted
a gentle reminder that y'all out ya minds
if you've been reading my comments in recent months, you know we've adapted to the point that a permanently expanding bubble - or a collapse into a ball of flames - would both be just fine with us 🌹♻️🗑️
but still ...
We seem to be somewhere between Euphoria and anxiety on the chart? Projected 10 year returns from here looking like -6% annually would fit in with this high valuation and high inflation highlighting the fed impotence to deal with inflation
Historically, following the herd always works in the middle of a market rise or fall. However, “crowd wisdom” is ALWAYS wrong at the extremes.
realinvestmentadvice.com/wis…
1
Shares Doctor retweeted
🚨The US stock market is more overvalued today than at any point in the last 125 years:
Tobin's Q Ratio hit 2.11, the highest reading since records began in 1900 and +149% above its long-term average of 0.85, according to Advisor Perspectives analysis.
The Q Ratio measures the total market value of all US corporations relative to the replacement cost of their physical assets.
A ratio above 1.0 suggests the market is pricing companies above what it would cost to rebuild them from scratch.
At 2.11, investors are paying more than twice what these companies would cost to replace, the highest level on record.
However, this is not a short-term timing indicator, and high readings can persist for extended periods, particularly where intangible assets, software, brand value, and earnings power are poorly captured by replacement cost measures.
Historically, extreme Q Ratio readings have tended to align with late-stage bull market conditions, including prior major peaks, but the signal is more structural than tactical.
The market is not just expensive, it is priced for perfection.
Shares Doctor retweeted
We have reported that margin debt at brokerage firms and the ratio of margin debt to cash reserves in brokerage accounts are both at all-time highs.
Borrowing money via repurchase-agreements (repos) to gamble in financial markets has been increasing rapidly, too. As you can see in the chart, repo activity through the Fed was negligible through mid-September 2025, but in the past four months, it has soared.
Shares Doctor retweeted
⚠️US growth stocks have NEVER been this expensive:
The cyclically-adjusted P/E ratio for the US MSCI Growth Index hit a RECORD ~74x.
This measures how much investors are paying per Dollar of average earnings over the last 10 years, adjusted for inflation.
This is WELL ABOVE the 2000 Dot-Com Bubble peak of ~70x.
The LT average from 1985 to 2015 was ~30x, meaning current valuations are 2.5 TIMES the norm.
This is UNCHARTED territory, and history suggests such valuations do not end well.
Shares Doctor retweeted
⚠️The US yield curve is rapidly STEEPENING:
The difference between 10-year and 2-year Treasury yields has sharply risen over the last 2.5 years.
The yield curve has now been positive for 14 months, reaching its highest in 4 years.
In the past, once the yield curve turned sharply positive, the US economy was already in a recession.
This time, a combination of interest-rate cuts tied to a recessionary job market and concerns over soaring US public debt and large deficits is driving the move.
