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People will ignore the facts until it is too late.

By David Scott | Monday 11 April 2016


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


The main lesson to be learned from market history and particularly from yield-seeking bubbles is not that valuations are irrelevant, nor that central bank intervention is capable of sustaining bubbles permanently, but that Investors fall prey to the delusion that easy money can support stocks once risk-aversion sets in (recall 2000-2002 and 2007-2009). Investors must not make the same mistake of discarding the essential lessons that valuations have taught in complete market cycles across a century of history.


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