Axios reports that new homeowners may not turn a profit for over a decade, creating a dire situation. Trapped in a cycle of debt and depreciation, they face a challenging housing market. Advocates urge government intervention to regulate and make housing more affordable and sustainable.
Furthermore, concerns arise about a potential lost decade in the stock market, reminiscent of the 00’s or 70’s, triggered by rising rates. Investors are cautioned as the ‘Magnificent Seven’ stocks start resembling the ‘Nifty 50’ of the 1970s, signaling potential risks.
Drawing parallels, Wall Street strategist Torsten Slok notes extreme concentration in today’s market and comparable earnings multiples between the ‘Magnificent Seven’ and the ‘Nifty 50.’ Comparisons extend to the S&P 500 information-technology sector during the dot-com era.
Investors are advised to reflect on the lessons from the Nifty 50 era, given the significant declines during the bear market of 1973 and 1974. During this period, the S&P 500 plummeted by over 40%, with leading stocks experiencing even more significant losses.
The debate about whether the high valuations were justified during the Nifty 50 era remains a subject of ongoing discussion among academics studying financial markets. As uncertainties loom, investors are urged to exercise caution and draw insights from historical market trends to navigate potential challenges ahead.
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We also could be facing a lost decade in the stock market, similar to the 00's or 70's- cue rising rates. pic.twitter.com/01YRjvlC5y
— Phoenix Capital (@PhoenixCapitalH) December 4, 2023
Investors beware: ‘Magnificent Seven’ are starting to resemble ‘Nifty 50’ stocks that got crushed in the 1970s market crash. https://t.co/CxUumM3vCZ pic.twitter.com/0ZIzFiDevi
— Holger Zschaepitz (@Schuldensuehner) December 4, 2023