Read this interesting piece about 7 years ago. It is unconventional and contradicts the texbook. But I find it very relevant. It was the market liquidity that drove the market for the past 10 years and vice versa could be true when the liquidity is being withdrawn.
US is reversing QE and Central Banks worldwide are raising interest rates. These may lead to derating of stock PE multiples, leading stock prices to decline even though the earnings are holding up well. It may not be a right time to catch the falling knife and increase exposure in the stock market now. Key numbers to monitor are the money supply and interest rate.
Read the article -> How stock market and economy really work by Kel Kelly
or listen to the audio version at Youtube -> https://www.youtube.com/watch?v=-6igz3GpoJM
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