Bill Blain: “Maybe It’s Time To Quietly Exit”
By Bill Blain of Mint Partners
ZeroHedge.com
May 15, 2017
“In yacht racing, there is no second.”
Ah the joy of a new week! What’s on the recipe today then?
My colleague Simon Denehy started the day by pointing out UK 2-year gilts yield 0.12% – (his description of that number was more colourful and expressive, but would have had me banned from ever blogging again) – while UK stocks yield an average dividend of 3.8%.
That imbalance between stocks and bonds goes some of the way to explaining why the FTSE has hit a new all-time high at 7445 (and up) this morning.. Perhaps it would be wrong to call it an “imbalance”. Stocks represent taking real risk on a company, while Gilts are sovereign bonds; as close as we can get to the risk-free cost of money.
But, there is clearly a disconnect between the risks of a company performance (and that it might not pay a dividend) and the price of stocks, which are about future performance and have taken off like a butcher’s dog with the sausages. Funny, but not a good thing. Its happening in stocks around the globe. This morning stocks are up because China is planning to boost market, last week it was improving global indices and numbers, and before that it was the “Trump-Jump” expectations.
Take a look at the chart of the FTSE (I’ve attached a Bloomberg) and there are a series of three very pronounced tops in 2000, 2007 and now… isn’t there something about 3 up-waves and two down waves (Elliot Wave sorcery).
The Rest…HERE
