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prytania3
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« Reply #30 on: November 19, 2009, 09:09:03 AM » |
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Meredith Whitney has gone bearish again.
Lions, and tigers, and bearish, oh my!
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Clowns, I tell you. Clowns.
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mad_doctor
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« Reply #31 on: November 19, 2009, 09:26:04 AM » |
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I'm shocked. Shocked to hear this!
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mdwlark
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« Reply #32 on: November 20, 2009, 08:52:35 PM » |
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Posting to get this in my "new replies" list. Pry, are you still predicting 11,000?
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prytania3
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« Reply #33 on: November 20, 2009, 09:25:16 PM » |
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I still think so, yes. Each time the market goes down, it seems like people see it as an opportunity to get in.
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Clowns, I tell you. Clowns.
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bud04
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« Reply #34 on: November 20, 2009, 09:33:49 PM » |
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Prytania what will happen when the Dow crashes in 2010? Can you elaborate? How low will it go? How will it affect the economy?
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prytania3
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« Reply #35 on: November 21, 2009, 02:26:39 AM » |
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Prytania what will happen when the Dow crashes in 2010? Can you elaborate? How low will it go? How will it affect the economy?
*If* it crashes it will probably go a little above last March's lows, but I wouldn't necessarily count on a crash. There's a real disconnect between stock valuation and stock prices. Another thing is many stocks have a lot of short interest, and any bump up starts a short squeeze. I think there are too many bears still out for the market to crash. You crash when everyone is mad bullish. But I stand by my 1100 and will have to reevaluate at that time. |
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Clowns, I tell you. Clowns.
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mad_doctor
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« Reply #36 on: November 21, 2009, 09:51:18 AM » |
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You may be right, but I honestly wouldn't be surprised to see the market hit 4000 on a panic sell-off. I believe you are correct, though, that the market's true valuation is somewhere around last March's lows.
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prytania3
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« Reply #37 on: November 21, 2009, 07:45:06 PM » |
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You may be right, but I honestly wouldn't be surprised to see the market hit 4000 on a panic sell-off. I believe you are correct, though, that the market's true valuation is somewhere around last March's lows.
Well, Prechter sees it going to 1000, but for that to happen I really believe there would have to be some world cataclysmic event. I think for it to hit 4000 would also depend on some dire news, but hey, you never know. I think some companies *are* actually profiting because they've laid off people and are working on the lean and mean basis and with the dollar so low, it's good for exports, but there are some sectors I do not understand--like retail, for example (exception being WalMart). Also I don't see much help for the home builders anytime soon--Beazer, Toll Brothers, et al. I don't see a recovery in the housing market anytime soon. I really don't, and I'd actually like to dump one of my houses in Virginia, but I don't see that being possible for a while. Now, John Paulson (who bet against the housing bubble) aside from taking a huge position in gold has also bought a lot of stock in C and BAC, and I do see some growth in the financials; although, I think it's a damn shame Ken Lewis is stepping down from BAC. I think Merrill is going to turn out to be a good investment even though it was such an initial albatross, and I don't think Lewis had any choice but to buy it because I think Bernanke and Henry Paulson had him by the balls. Evidently the search to replace him isn't going that well either. Also, one should never underestimate the power of the Plunge Protection Team. |
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Clowns, I tell you. Clowns.
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mad_doctor
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« Reply #38 on: November 21, 2009, 09:39:14 PM » |
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The S&P 500 has a P/E ratio somewhere in the 120 - 150 range the last time I checked, prytania. By way of comparison, a P/E of 20 is generally a good buy, a 40 is a buy if the company has solid earnings forecasts for the foreseeable future, a 60 is usually not a buy unless it's a really special company with great management and a very optimistic future, a 120 is overpriced, and a 150 is a WTF?! Why are you even looking at companies with a P/E of 150?!?!
If the S&P & Dow were to correct themselves to have a P/E of 50 they would be valued at about 450 and 4300, respectively.
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prytania3
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« Reply #39 on: November 21, 2009, 09:52:06 PM » |
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The S&P 500 has a P/E ratio somewhere in the 120 - 150 range the last time I checked, prytania. By way of comparison, a P/E of 20 is generally a good buy, a 40 is a buy if the company has solid earnings forecasts for the foreseeable future, a 60 is usually not a buy unless it's a really special company with great management and a very optimistic future, a 120 is overpriced, and a 150 is a WTF?! Why are you even looking at companies with a P/E of 150?!?!
If the S&P & Dow were to correct themselves to have a P/E of 50 they would be valued at about 450 and 4300, respectively.
Where are you getting that figure from? Shiller puts the P/E at about 20, which admittedly seems pretty low. http://www.multpl.com/table |
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mad_doctor
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« Reply #40 on: November 21, 2009, 10:18:34 PM » |
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The S&P 500 has a P/E ratio somewhere in the 120 - 150 range the last time I checked, prytania. By way of comparison, a P/E of 20 is generally a good buy, a 40 is a buy if the company has solid earnings forecasts for the foreseeable future, a 60 is usually not a buy unless it's a really special company with great management and a very optimistic future, a 120 is overpriced, and a 150 is a WTF?! Why are you even looking at companies with a P/E of 150?!?!
If the S&P & Dow were to correct themselves to have a P/E of 50 they would be valued at about 450 and 4300, respectively.
Where are you getting that figure from? Shiller puts the P/E at about 20, which admittedly seems pretty low. http://www.multpl.com/tableI usually get my info from either Bloomberg or Seeking Alpha, prytania. Here's one about the S&P 500 from Seeking Alpha: http://seekingalpha.com/article/161619-s-p-500-s-pe-ratio-of-139-isn-t-sustainableI think it's a huge drop in earnings that's the culprit in this case, although the index is up a little. |
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mad_doctor
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« Reply #41 on: November 21, 2009, 10:23:38 PM » |
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BTW, I should add that I usually don't trust earnings reports in times like these. I suspect that actual earnings are somewhat lower than the official reports. But that's me - ever the cynic...
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prytania3
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« Reply #42 on: November 21, 2009, 10:41:44 PM » |
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In the end, you have to do the ratio calculations yourself, which is a total pain in the ass. Which 250 do you want to take? Hehehe.
That said, I don't much trust the books either, but unless you're a forensic accountant, it's pretty hard to know if companies are on the level or not...and a lot of accounting deals with estimations. I used to think numbers didn't lie until I began my accounting odyssey, but hell, you can make numbers lie, sing, or dance.
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Clowns, I tell you. Clowns.
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mad_doctor
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« Reply #43 on: November 21, 2009, 11:00:10 PM » |
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In the end, you have to do the ratio calculations yourself, which is a total pain in the ass. Which 250 do you want to take? Hehehe.
That said, I don't much trust the books either, but unless you're a forensic accountant, it's pretty hard to know if companies are on the level or not...and a lot of accounting deals with estimations. I used to think numbers didn't lie until I began my accounting odyssey, but hell, you can make numbers lie, sing, or dance.
Too bad you can't just download a spreadsheet with everything you need. BTW, doesn't Shiller use his own computation? Something like a moving average? I don't recall the details. |
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prytania3
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« Reply #44 on: November 21, 2009, 11:47:22 PM » |
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I just looked at some stocks randomly, and the trailing P/Es as a rule are higher than the forward P/Es. The only two that looked really whack (although I sampled--didn't go through all 500) were ANF and BAC. ANF had a trailing of 164 and Bac had 180 or something. Many of the valuations looked a bit high considering growth, but if the average trailing is 130, it's probably more indicative of a few stocks kicking the average way up.
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Clowns, I tell you. Clowns.
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