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  • 2009 S&P Earnings: Don't Believe the Analysts [View article]
    Can we go down a road of logic?

    Would you agree that in a period following decades of a higher than normal P/E ration that we should expect to see a mean reversion, causing the P/E ratio to be lower than normal? This is based on the belief that the economy cal only grow so fast over time and must average out over time.

    Would you agree that the average P/E ratio over a full generation (80 years) is approx. 14?

    Would you agree that debt in AMerica is at a historic high for the consumer?

    Would you agree that savings are at a historic low?

    Woudl you agree that housing prices are dropping faster and farther than ever in the history of our nation, or at least since the great depression?

    Would you agree that our population is aging and that this trend will continue for a decade or two and that this is not conducive to growth of the economy?

    Now, given all those FACTS, doesn't it make sense that you should NOT be optimistic about the stock market for at least a few years?

    --Fred
    Dec 13 15:44 pm |Rating: 0 -2
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