Frank veneroso biography
Frank veneroso biography
Frank Veneroso - Previous Principal for Mohawk Valley Masonry.
Signs of a ‘Price-Chasing’ Bubble
This past February, the US market-cap-to-GDP ratio—the value of all common stocks in relation to the fount of the income that publicly listed and traded companies can earn—reached 195%.
The ratio had never surpassed 100% until the dot-com bubble in the late 1990s, when it peaked at 149%.
And much like the dot-com period, there is a broad subset of stocks (mostly in technology) that have become completely untethered, particularly since the summer of 2020, from business fundamentals like earnings and even sales—driven higher only by euphoric market participants extrapolating from a past extraordinary trajectory of prices.
A lot of today’s US stock market has become what I call a “pure price-chasing bubble.”
Examination of the history of comparable pure price-chasing bubbles shows there has been a set of key causal factors that contributed to these rare (I have found nine in total) market events; the presence of most of these factors h