Do you have any biases against a Stock or Sector

Today’s Daily Byte

The stocks are just collapsing on each other, and we haven’t yet found the bottom. Today, we’ll essentially go through a journey, particularly looking back at small-cap stocks, and try to discuss if there’s an end to this market pain. This video will be especially useful for those who haven’t been through such cycles before.

If you were to ask any experienced investor, the pain so far is nowhere near what the market is capable of. So, from that point of view, you can either say that the markets are useless, but the problem is that we only want the upside and aren’t willing to take the downside. That’s the main issue, because the market setup works in such a way that you can’t have one without the other. No investor in history has been able to get only the upside without some downside or drawdown.

Given that background and expectation, it’s important to see where you stand. Had you not entered the market at all, what would your situation be?

Reading Time : 4 Minutes

Never hold biases against any Stock or Sector

This chart compares the CNX 500, represented by the white line, and the CNX Real Estate Index, shown as the golden line. Over an 11-year period from 2000 to 2020, the CNX 500 outperformed significantly, delivering a 335% return, while the Real Estate Index remained flat at zero. During such long stretches of underperformance, it’s natural to dismiss a sector as irrelevant or unworthy of investment.

The mantra for successful investing lies in. . . . .

Reading Time : 4 Minutes

Has the Buffet indicator stopped working

Friends, let’s talk about the Buffett Indicator, which measures Total Market Cap to GDP and is often used to gauge whether the market is overvalued. Looking at the chart, the current ratio for the US market has hit an incredible 207%. For context, during the Dotcom Boom in 2000, it was around 140%, and during the 2008 Financial Crisis, it was close to 100%. Traditionally, Warren Buffett considered anything over 100% to be a sign of excessive risk.

Yet, for nearly a decade now, the US market has remained above this threshold, seemingly defying traditional valuation models.. . . . .

Reading Time : 3 Minutes