'There is no alternative' — Stocks' long-running 'TINA' advantage could be ending, worrying traders

The Federal Reserve has been furiously pumping money into the economy, and much of that money has found its way into the stock market and has been a major factor in why equities have done so well in the last year.

Big-cap technology stocks in particular saw dramatic rises in P/E multiples in 2020. Chip maker Xilinx, for example, went from 25 to 50 times forward earnings. NVIDIA went from 30 to 60. Even old-school big cap tech stocks saw big moves up in their P/E levels last year with Microsoft going from 25 to 35, and Apple leaping from 20 to 35.The bad news is that even if bond yields don't move higher, the current move up appears to be putting a ceiling on valuations.

Jim Paulsen from Leuthold has been a consistent bull on the rates vs. stocks debate. "As [Fed Chair Jerome] Powell just said, a primary reason that bond yields are rising is because 'real economic growth' is recovering smartly," he told me in an email.

The same arguments made during the period from 1929-1934. It ended when FDR Appointed Kennedy to run the SEC. With years of the GOP reducing the SEC to a rubber stamp, President Biden should look at enlisting the help of men like Warren Buffett to once again level the field.

GME 🦍 💎 🤚🏻

BitcoinTina thought this was about you for a sec

thank you very much for your work

Not buying this bearish fake news. This isn’t news, this is an opinion piece written by a guy with bearish sentiment. Report news not opinions or rename yourself to the Enquirer. Bonds are only useful as backing for a portfolio. Don’t shut yourself out of equities.

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