Time for market timing?

On the last working day of 2017, the Ermine pulled up the FTSE100 index and was greeted with the following tribute to irrational exuberance.

FTSE100 2012-2017
All hunky dory and way up in the clouds, eh. What on earth could go wrong here?

What’s a fellow to do? Way back when, I wrote a post inspired by the reported comment by a City gent, to the effect of I don’t know WTF we are doing up here, with the implication that it’ll all end in tears. That was in 2013, with the index about a thousand points lower than now.

I’m still heavy on FTSE100 shares in my HYP, despite efforts to build around them with world index-trackers, which tend to be over half exposed to the US. I used to grouse about that, buying into an overpriced American market, but not so much now. Which brings me to the problem for a net investor, where the hell do you find value?

1712_btc-740x480

Ah yes, Bitcoin. It’s the latest craze, tulip bulbs got nothing on this, along with the stories of people making loadsamoney. Trouble is the price curve looks like an exponential ramp, which means if there is value there it’s largely captured by people who were into it over a year ago. Not going there – at least some of what you buy on the stock market is a productive asset, and it’s always nice to see that in an investment, though I will make an exception for gold due to its long history 😉

the fog of war and confounding factors

One confusing factor for Brits is that  we voted last year to kick all those foreign sorts out and/or take back control at the cost of our economy, so the value of the pound is down a long way. Which has the effect of making everything else look higher than it really is, so say a fifth of this effect is due to the fact that the numbers on the vertical scale are 80% of what they used to be. In a country with a midget currency, everything looks like the work of kings. So some of this gain isn’t real, although it still makes life more expensive for  savers buying their future income streams using the fruits of their toil earned in Great British Pounds, because wages haven’t gone up 20% to compensate. I guess Remoaners often work in the City so they may be getting some salary lift, which seems only fair for having their futures shat on. Most Brits aren’t so lucky as to get wage rises, but at least they got the result they wanted. Continue reading “Time for market timing?”

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