[sammyg2]

Remember the year 2000, and the dot com bubble?
I do.
It didn't make any sense but kept going up and up and up, until it finally didn't anymore.
then it was all over 'cept the crying.
Not me, I missed the drop for the most part but did OK in the long gradual recovery.

Mania has taken hold in the equity market and there is “no respect” for risk, says one strategist
Published: Feb 19, 2020 11:47 a.m. ET


Veggie-foods maker Beyond Meat BYND, +4.02% trades at 282 times estimated earnings. Tesla’s TSLA, +7.97% stock price has doubled this year. Virgin Galactic’s SPCE, +13.53% stock price has nearly tripled in 2020.

The world’s most profitable company, Apple AAPL, +1.60%, withdraws its revenue guidance, and the technology-heavy Nasdaq Composite actually closes higher on the day.

Mike O’Rourke, chief market strategist at institutional broker JonesTrading, says a “mania” has taken hold, blaming zero-commission retail brokers, the Federal Reserve’s injections of liquidity, the forced buying from index fund managers, and active fund managers who are too scared not to follow suit.

“The bottom line is there is no respect for risk in the equity market and mania is not indefinitely sustainable, there is no permanently high plateau,” he writes in a note referencing Rodney Dangerfield, the comedian who famously couldn't command respect.

John Rekenthaler, a columnist at fund-ranking service Morningstar, attempted to divine when investing becomes speculation. It wasn’t an easy task. The conclusion he reached is that an expenditure when the return is too uncertain or likely negative is speculation. But even that is too simple a definition, he writes.

“Securities with barely positive expected returns and extremely high volatility are speculative — unless their performance is negatively correlated with the rest of one’s portfolio, in which case the investment may be warranted,” he says.

There is a record high level of unused share buyback capacity, according to JPMorgan, leading the bank to think buyback announcements will decrease. Higher valuations also may tempt companies away from new buybacks. Instead, companies may focus on capital expenditure, dividends and mergers and acquisitions, the bank said.

https://www.marketwatch.com/story/in-a-market-with-no-respect-for-risk-whats-the-difference-between-investment-and-speculation-2020-02-19?siteid=yhoof2&yptr=yahoo