You beat me to it @Noddy74

I really liked his framing of FOMO vs. Risk of Ruin as well as the good bubble paradox (where the technology succeeds even though almost all associated stocks crash).

So the tech (maybe) is inevitable but the valuations are not.

Finally got around to listening to this today, because of holidays and what a great thought provoking listen. Typical Howard Marks intellect.

I was especially taken with the idea of "good v bad" bubbles and Howard's take on it based on the books written previously, which i didnt know about.

I found a lot of comparisons to the existing Data Centre explosion currently underway worldwide. These data centres are the new bricks and mortar/rail lines of the world and lots of them are going to be built in the wrong places and capital will be just burnt, but plenty of data centres will be required.

Is there a bubble just in that specific area of Data Centre construction. I firmly believe so. The amount of jobs and projects currently underway in Western Australia alone, tell me that things are "hot" in that sector alone and they cannot get people to build these centres, let alone the critical power and water needs.

S&P500 and ASX300 ETFs have, for a long time, behaved in investors’ eyes like high-return, low-risk savings vehicles. This perception has created a disconnect between ETF holders and the underlying businesses, fostering the belief that broad-market ETFs only go up. The sentiment is much like that around the Australian property market, where price rises are seen as inevitable. If Mr Market shifts from exuberance to despair, many investors could be left feeling very confused and perhaps misled.

Great line @DrJP

When you can't save in money long term, people seek the next best thing. ETFs and resi property being top contenders

Things have to go to some gory version of hell-in-a-handbasket to do 5 and 6. Realistically, is this anything ordinary mom-and-pop investors committed to a lifetime of investing and building their nest egg can, should, or even ought to do? If so, under what broad circumstances (even nuclear Armageddon doesn't cut it, because, let's face it - the stock market won't matter in such a dire scenario anyway!).

I have been investing for a little over a decade, and have never even contemplated it despite some painful drawdowns over this time. I would love to hear the experiences and views of folks who are far smarter and have been doing it for far longer than moi. Gracias!

So true, that is the fundamental problem which I was dancing around.

Nice one @Noddy74 -- Marks' memos are always a must listen for me. I haven’t hit this one yet, though. Not that I need more reasons to be bearish!

Totally agree that valuations remain stretched, for the most part, but who knows how much further they can run..? What might make this cycle different is that it’s all happening amid accelerating monetary and fiscal crosswinds. Stocks rotating through cheap to expensive in the context of a "typical" business cycle is one thing, but this time we’ve also got a US administration still spending aggressively, while at the same time the fed is increasingly accommodative (and politicized). Same thing more or less in the EU and elsewhere.

It’s also unusual to see gold and bond yields rallying while equities and property are flying, and then you layer in China’s domestic issues and all the geopolitical stuff.

Markets are rarely neat and tidy, but this one seems especially challenging. So while there are good reasons to be concerned, it wouldnt surprise me to see equity markets march higher for longer than what might otherwise be the case simply because the usual "risk off" asset (government bonds) are so utterly unattractive.

It's always fun to speculate, but from a practical standpoint the approach for me remains unchanged, which is basically just to try and hold companies with decent prospects and have an ability to weather any storms.

@Noddy74 , good luck with that, I'm in the just give me a great stock story camp. out of interest, how would you define a bubble popping? IMO a SP or sector has to be down 80% or more to be a burst bubble. eg internet bubble, plus a few select others online gaming, green energy spring to mind, these days seems there are bubbles everywhere, and corrections are defined as bubbles bursting? maybe the tolerance of SP declines is much less? idk

@Solvetheriddle Fair point. ‘Bubble’ might be hyperbolic. I don’t necessarily mean an 80% dot-com style wipeout, although the Dow drawdown was less than 40% and the S&P less than 50%, which I would think is within the realm of possibility. More that many valuations (PEs especially) feel stretched to a level that’s tough to justify. I should also put it in context. I default to a fully invested position. At the moment I'm 10-15% cash (never know whether to include super on not), which is notably high for me. If I go much above 25%, I'm heading for a bunker. Should the cycle run longer, I’m still plenty exposed, but at least I’ll sleep better if things do roll over.

Thanks @Noddy74 , @Strawman , I did not know about his Memo podcast!

@Noddy74 the run up since the Trump Dump has been pretty ferocious, so I'm definitely not a buyer of risk, and would/have moved some more market exposed and volatile stuff to safer havens, but its not a big move, ive gone from all in in April to about 4% cash now but while the stocks i hold could or would see SP pullbacks im pretty happy with their financial strength, they will survive as businesses, cant see a scenario where i am a forced seller so just ride it out.

for eg sold some HUB CAR and LOV and bought some CSL and UNH, so taking some heat out, thats the plan anyway, lol

good luck

Like a lot of people on Strawman, I'm a huge fan of Howard Marks. He gave a Podcast ~3 weeks ago which I haven't seen published on SM.. but I might have missed it.

What I really love about this one is Howard's discussion on Investing without Emotion. That component starts at 18:45 which is where I've made the YouTube link start.

I love his answer at ~25:20 where he explains that he was born unemotional which is really great for Investing, but not so good for other arenas in life, like marriage. And that his biggest mistake has been being naturally too conservative otherwise he might have made more money over his career.

Those answers certainly resonate with me.

Cheers

JM