I started a YouTube channel that will begin with my $BBBYQ video series uploaded if you prefer to watch or listen there. I've starting with Part 1: Interests; here is a direct link: https://t.co/4zhjZCplht
more soon!
The Hollow Men Lost In The Overnight Drift $GME
With the topic of "Overnight Drift" trending I decided to revisit it. It is the phenomenon where most stock gains come from overnight trading and not during market hours.
Bruce Knuteson, a former physics professor at MIT and former quant trader at DE Shaw, wrote several papers on this topic.
In his first paper on this topic from 2016 titled "Information, Impact, Ignorance, Illegality, Investing, and Inequality," he sought to answer "...why the cyclically adjusted price to earnings ratio of the S&P 500 index has been oddly high for the past two decades, why gains to capital have outpaced gains to wages, and the persistence of the equity premium."
His conclusion, in layman terms, is simply that market participants pump up stocks in the morning while taking advantage of wider bid-ask spreads and selling in the afternoon with the advantage of sharper bid-ask spreads. This causes the stock price to "drift" into the direction he wants it to go, which over a long period of time is typically up. In turn, we end up with publicly traded companies that have valuations completely detached from their fundamentals.
While it may not be a complete answer as to why the stock market is seemingly always disconnected from the economy, it does give a credible explanation. It's a major driving force in the wealth inequality between those that participate in the markets and those who depend on wages for a living. To add insult to injury, wages are severely oppressed via the oversupply of labor thanks to programs such as H1Bs, major influx of legal and illegal immigration, hiring overseas, etc.
This is how we ended up with two completely different Americas, one filled with Hollow Men and one filled with a minority of parasites thriving on blood money. However, the "Vampire Baal" is coming to an end.
The cyclically adjusted price to earnings (CAPE) ratio was created by Nobel Laureate and Yale economist Robert Shiller. It also goes by the name of the Shiller PE Ratio. It was created to adjust price to earnings in the context of inflation.
The Shiller PE ratio nearing it's December 1999 peak of 44.19, right before the infamous Dot Com bubble burst. It is currently 41.57 as of this writing and basically means the current market condition is severely overvalued.
I am not the first to say this and I certainly won't be the last, but we can expect a major correction that will bring the Shiller Ratio down to it's average of 17.
A generational market meltdown certainly won't end well for GameStop's short sellers.
The average person: I really enjoy spending time with family, watching football, hiking and hunting, and going to movies. Politically, I’m most concerned about the rising cost of living.
Mark Levin:
So...does Pierre Omidyar just let his State Department buddies use eBay conference rooms whenever they're in town? 🧐
I wonder if they get the full tour including seeing Pierre's broken laser pointer & drinks at The Sellar/Walker's West? 🤨
https://t.co/XblvkEylSW
Pierre Omidyar's decades long connections to the US security state have also been well documented by @MaxBlumenthal & @RealAlexRubi at MintPress News, revealing there's far more to the billionaire recluse than the auction site he is famous for founding.
https://t.co/15hzc3WKm0