The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants.
The bottom line however, no matter what sort of investing/trading you wish to do, the most important thing is your risk management. I’ve been in this game for over 26 years. I’ve seen so many people “blow up” because when the market was hot, and they were making gains every day, that they thought they were geniuses. But, then the market decided to roll over into a bear market, or even just a good correction, and they got crushed, losing it all. It’s all about risk.
Stock buybacks and dividend payments are on the verge of gushing out of Wall Street banks’ faucets and breaking through the proverbial dam.
Friday’s article blog pointed out that in 2018, only 43% of companies in the S&P 500 Index incurred any expenses for research and development.
And just 38, or 7.6%, of companies accounted for 75% of the R&D spending of all 500 companies in the index.
So, I asked, where’s all the corporate cash been going?