Come Hell Or Hyperinflation

I can’t imagine how any sane person would take a look at this article I published last week and conclude anything other than that the stock market is extremely overvalued.

And I mean, heading into nosebleed, unprecedented territory. Yet the market continues to rage higher, and nobody seems concerned. To me, this means there is only one legitimate question investors should ask themselves heading into 2025.

To put it simply, that question is: “Is it different this time?”

Investors often joke about the phrase “it’s different this time” as a way to ironically note that it is never different and the market always winds up puking back bad investments and healing itself of speculation, euphoria, frauds, and all the other wonderful things that come with perpetual bull markets fueled by money printing.

But I think that’s the legitimate question investors need to meditate on heading into the new year. Because if it really isn’t different this time, and all the laws of economics and historical market norms of the past apply, we’re undoubtedly due for a catastrophic crash in the stock market at some point. I can’t pinpoint which hole on which balance sheet will catalyze it, but I’m certain there is more than enough detritus and buildup floating around out there to light multiple crash fuses at once.

I’ve often said on this blog that institutions are panicking, businesses are imploding, frauds are running out of runway, and massive write-downs are being pushed off for just one more quarter right now, as you read this very sentence. We just won’t find out about them until further down the road.

Not unlike monetary policy and the effect of interest rates, there is always a lag in reality making its way to the surface in financial markets. The trillion-dollar question is how long it’ll take, what means it will rear its head through, and what the public reaction will be.

Let’s take a step back and examine a couple of the historical indicators that were pointed out last week...(READ THIS FULL COLUMN HERE).

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