Official Evidence That the Stock Market Is Insane

In this video, Motley Fool analyst Austin Smith sits down with host Mark Reeth to look at one headline that proves the market is totally bonkers. He discusses why strong employment and homebuilder numbers had the baffling effect of causing stock prices to fall, and why this can only represent an excellent buying opportunity for Foolish long-term investors.

With the American markets reaching new highs, investors and pundits alike are skeptical about future growth. They shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines three companies that could take off when the global economy gains steam. Click here to read the full report!

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  • Report this Comment On August 25, 2013, at 6:51 PM, Foreeverlong wrote:

    What that really worth putting up there?

  • Report this Comment On August 25, 2013, at 7:54 PM, PEGformula wrote:

    This is shameful of Fool. Always stock pumping. They should read the articles "2X overpriced stock market" that speaks of PE ratios relative to the type of economy and "Negative 10% GDP Growth" that goes into how our government does not properly calculate the figure. We are in a masked depression with an unlawfully manipulated stock market. Our economy worsened since 2009, not gotten better and why should stock prices be up more than 150% from the lows of 2009? There is no good fundamental reason. The prices in 2009 made sense, now they do not.

  • Report this Comment On August 25, 2013, at 9:51 PM, RMengineer wrote:

    But the problem with the jobs numbers is that when you actually look at what lies beneath rather than just numbers, it packs a double whammy of negativity. "Jobs" are _not_ a commodity item economically such that any job is as good as the next in terms of economic productivity and growth. Some jobs contribute far more to the economy than others, and some far less than others.

    On the one hand, those "jobs" are largely low pay and/or part time jobs - not the kind of jobs that bode well for growing the economy from the demand/consumer side.

    On the other hand the skilled and highly productive jobs that are needed to be filled to grown the economy on the productivity side are going _unfilled_. Not a good sign when the jobs that would grow the economic productive are _not_ being filled_.

    And by the way - those _productive_ jobs that are going unfilled are the same jobs that _pay_ that are needed to be filled on the demand/consumer side.

    So until _those_ higher productivity/higher pay jobs start getting filled, "jobs numbers" inflated by low pay/low productivity jobs is fairly meaningless in terms of being a positive indicator for economic growth.

    Oh yeah, and "homebuilder numbers" - why would you think that is "real" and not just another artificially inflated bubble as a result of absurdly low interest rates kept at that absurd artificial level by Fed smoke and mirrors? Not to mention the fact that any short term rise is also probably due to the fact that the Fed is now threatening to take away the punch bowl so people are rushing to get a glass before that punch bowl goes away.

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