S&P Target 2000: Air Pocket Ahead - Part IV [View article]
You know Seth, when I ask myself "maybe", I start to worry about greed. I have nothing against making "stupid" bets - my best performers YTD have been ODP, RSH, FIATY.K and I expect GTI to follow. Of course, these are special situations. Re the big sectors, Housing and related remains overweight, Consumer non Durables as well as Durables are OK, by my book, because while their multiples look high, I think their E's are too low. Short term, I would sell any that look exponential - unless it has a huge short interest.
Debunking Birinyi's 'S&P To 1900' Thesis [View article]
Hi Damir, good try to take on Laslo. But good luck, he is pretty good. FYI, I called S&P 1600 in October 2011 - see http://seekingalpha.co... , and 2000 in April 2013. Plenty of fundamental arguments. The main one you are missing, even though you have part of the story right, is that the only post WWII period during which P/Es were in a 8-14 range was 1972-1981. I found no other explanation than mine, which is that at the time, inflation was deemed structural, a combination of concerns over Oil Supply and Baby Boomers Demand-led inflation. Since 2008, the spread between the Earnings Yield and the 10-Year Note reflects the uncertainty about the economy, Sarbanes Oxley, QE, etc. However, the bet to make was, would we go back to the normalize spread and P/E trading range of 14/26? In the meantime, of course, one had to take a stand on Europe and a potential liquidity crash there. It's all in my articles if you need arguments.
S&P Target 2000: Air Pocket Ahead - Part IV [View article]
Good question. Ultimately, the B/S will shrink back, to which level, I don't know. Remember, $800 Bn used to support a $15 Trillion GDP, now we need $3 Trillion. All you need to look at is http://bit.ly/smHrcb I don't believe QE will end before the Multiplier revives, so the first step will be a decrease in growth.
S&P Target 2000: Air Pocket Ahead - Part IV [View article]
Mano,
Charts are one tool in my tool box. if you care to o back to my other articles, you'll see a lot of other tools that you actually may never have heard of.
S&P Target 2000: Sold To The Gentleman With The Beard - Part III [View article]
I tend to disagree, actually. I own stocks at their lows and stocks at their highs. What I have learnt is that you only get a ten bagger if you keep a stock despite the fact that it is at its high - best example: URI since March 2009. Worst example so far: GTI.
S&P Target 2000: Sold To The Gentleman With The Beard - Part III [View article]
Seth, that's an interesting point, and true to a certain extent. It depends on whether the growth is linear or cyclical. Take homebuilders for example - one of the best performing groups since September 2011 - TOL sells at 12 times, PHM at 29, and JOE at 291. Back to the bearish comment from JCATRI, this shows that earnings are not yet normalized - another example: SLM sells at 8 times, and one of my favorites, AGM, at 7.
S&P Target 2000: Sold To The Gentleman With The Beard - Part III [View article]
Seth,
Good to hear from you. You can't pick a P/E in absolute terms. It has to relate somehow to the risk free rate. The next question, obviously, is what is the risk free rate? Let me throw this one at you - not that I give it strong odds, but for argument's sake. Let's say that three years down the road, the budget deficits, worldwide, are on the mend. Then the risk free rate gets its risk free rating back. By the same token, as economies improve, earnings regain visibility. What number do you get to?
S&P Target 2000: Sold To The Gentleman With The Beard - Part III [View article]
SilverD19, (a) my glasses are not pink colored, but they have money over time; (b) assuming there are no shorts - which is false depending on your stock selection - isn't this a reality check? (c) am not sure you want to have dinner with me, but what about a little wager? You call it.
Shadow Inventory Stats Show the Bottom May Be In for Housing [View article]
For those who wonder where I now stand on Housing, a couple years later (this is April 29, 2013): (a) this remains the only sector capable of moving the Employment Needle, so stimulative policies will remain in place until we reach 7%; (b) banks are no longer in a rush to liquidate whatever shadow inventory is left; (c) the rally will carry until stocks sell at around 7 times normalized earnings.
For those of you who wonder about my latest market musings now that we have reached my S&P 1600 target, check my latest article http://seekingalpha.co...
S&P Target 2000: Air Pocket Ahead - Part IV [View article]
S&P Target 2000: Air Pocket Ahead - Part IV [View article]
Debunking Birinyi's 'S&P To 1900' Thesis [View article]
S&P Target 2000: Air Pocket Ahead - Part IV [View article]
I don't believe QE will end before the Multiplier revives, so the first step will be a decrease in growth.
S&P Target 2000: Air Pocket Ahead - Part IV [View article]
Charts are one tool in my tool box. if you care to o back to my other articles, you'll see a lot of other tools that you actually may never have heard of.
S&P Target 2000: Sold To The Gentleman With The Beard - Part III [View article]
S&P Target 2000: Sold To The Gentleman With The Beard - Part III [View article]
S&P Target 2000: Sold To The Gentleman With The Beard - Part III [View article]
There Will Be No European Liquidity Crisis (Part 1) [View article]
S&P Target 2000: Sold To The Gentleman With The Beard - Part III [View article]
Good to hear from you. You can't pick a P/E in absolute terms. It has to relate somehow to the risk free rate. The next question, obviously, is what is the risk free rate? Let me throw this one at you - not that I give it strong odds, but for argument's sake. Let's say that three years down the road, the budget deficits, worldwide, are on the mend. Then the risk free rate gets its risk free rating back. By the same token, as economies improve, earnings regain visibility. What number do you get to?
S&P Target 2000: Sold To The Gentleman With The Beard - Part III [View article]
S&P Target 1600: The P/E Decompression Stampede [View article]
S&P Target 1600: The P/E Decompression Stampede [View article]
S&P Target 1600: The P/E Decompression Stampede [View article]
And if you believe this is just window dressing, remember, don't smoke it, bake it.
Shadow Inventory Stats Show the Bottom May Be In for Housing [View article]
For those of you who wonder about my latest market musings now that we have reached my S&P 1600 target, check my latest article http://seekingalpha.co...