John Lounsbury

Bracing for 2009 Earnings - Barron's

Rachael - - -

You quote Barrons as estimating 2009 earnings for the S&P 500 from two sources as $74.10 and $62.73. I have been reading estimates in the 40's in other sources. Can you explain the differences? Are some excluding one-time charges and the lower estimates including them?

Wall Street Breakfast: Must-Know News

"Only when the tide goes out do you see who is swimming naked." (Sorry, I don't have the attribution handy.) All of the Ponzis being uncovered at low tide make me wonder how many similar schemes were successfully bailed out over time by economic growth. Could it be that some of our idolized business success stories could have been built from such foundations?

Wall Street Breakfast: Must-Know News

Under water? It has happened before. I built my "dream home" in 1972. I owned the land and was able to finance the construction 100%, using the land value as equity. Within a few years, I am sure that the market value of the property was less than my mortgage, if I could have sold it, which was debatable .

Because of the oil crisis I was having trouble meeting living expenses. The cost of driving to work and the cost for heating my home approximately tripled in a short period of time. All other costs increased dramatically. Inflation rates in the 70's moved well into the teens. My income did not keep pace.

My family wore used clothes. We drove very little and had an old car. We went in the woods and dragged home firewood (by hand) so that we could use less heating oil. There were no vacations for five years. But never once did we consider foreclosure. We had a place to live and sacrificed everything else to protect it.

I sold that home in 2004 for ten times the original cost.

The current situation will also pass. We will come out the other side stronger. The pain may last for years. Government action may or may not help. Washing out the effects of shocks, in this case a credit bubble bursting, take time. Just remember, you don't hang the wash out to dry until all the detergent has been rinsed out.

The Case Against Investing in the Dow Industrials (For Now)

You could have made the 14,164.53 high on 10/9/2007 as the end of the growth cycle. It is true that the NASDAQ and S&P 500 showed their last top in early 2000, but you indicated you were discussing the DJIA.

That being said, very stimulating article.