Seeking Alpha

When you look at the basic fundamentals, stocks are trading at their cheapest levels since 1990,...

When you look at the basic fundamentals, stocks are trading at their cheapest levels since 1990, observes Bespoke Investment Group. According to the firm’s 2012 outlook report, once investors realize it, the ensuing buying spree should push the S&P 500 by 11% to 1,400, or possibly even more, by the end of the year.
Comments (32)
  • They said the same thing last year... and the year before... and the year before...once they get inflows back up theyll drop the market again and the game starts over..
    23 Jan 2012, 08:36 PM Reply Like
  • And, let me guess, all the "money on the sidelines" will come streaming into the market.
    What bull.
    Lets see some of the world debt problems get solved, starting with the USA not the EU, and then lets have this talk.
    23 Jan 2012, 08:40 PM Reply Like
  • The surge of funds from the retail doubters will be the sell signal. We're not even close yet, and markets will continue to climb the wall of worry. Almost ideal conditions for value investors.
    23 Jan 2012, 11:44 PM Reply Like
  • By the time you see evidence that these debt problems are being solved, the stock market is already going to be up 20 - 30%, or more. You need to buy stocks when it looks like the world is about to spiral into: a depression, hyperinflation, another financial crisis, the next "shoe is about to drop", the popping of some bubble, etc. Last August through September is an example of this, as was March, 2009, October, 2002, October, 1990, and many other times throughout history which only later in 20/20 hindsight proved to be a great time to be buying stocks.


    And by the way, regarding the U.S.'s debt problem, LOTS of people have been talking about this for years, that we're about to collapse under a mountain of debt, but if this were true, then why are interest rates 2% for 10 year U.S. gov't bonds? While it's 20%+ for Greece and 10%+ for Portugal. What do you know that the multi-trillion dollar global market for U.S. gov't debt doesn't know? And by the way, what's the right way to evaluate the creditworthiness of a country, or a corporation, or a small business, or anyone? By the absolute amount of debt they have? Of course not. Maybe the bond market knows something you don't.


    You may want to consider that there's more to all this than the way you're looking at it.
    24 Jan 2012, 07:49 AM Reply Like
  • so who's going to be the one to buy all these stocks at "fair value" and then watch the market plummet back 30% into discount territory again?
    23 Jan 2012, 08:47 PM Reply Like
  • I'm waiting for another March '09 buying opportunity. Won't be long now.
    23 Jan 2012, 09:03 PM Reply Like
  • Don't hold your breath. '09 was a once in a generation opportunity. I can see at most a 20% pullback, and I don't see that coming in the near future.
    24 Jan 2012, 12:02 AM Reply Like
  • Not exactly sure what definition you are using for "generation" I seem to recall a similar "once in a generation" low just over a decade the spring of 2000 as the tech bubble burst. Are you sure your not a bankster?
    24 Jan 2012, 02:11 AM Reply Like
  • I am not a bankster - I am using the current teenage pregnancy rate as a marker for generation, so around 13 years...
    24 Jan 2012, 02:22 AM Reply Like
  • When B.I.G gets that earnings are based on unsustainable debt & money printing... we'll see who the sucka is !
    23 Jan 2012, 09:07 PM Reply Like
  • 1400, eh? Is a deep Europe recession and the resulting drag on our economy to 0% or even negative growth factored in? Oh wait, a disorderly Greek default is already priced in. A recession...priced in. Huge multi-nationals getting hit hard from an appreciating dollar and EZ in recession...price in!


    The second these analysts start trying to outdo each other to the upside, you know a crash is soon coming. I remember when people were saying GOOG would hit 800-1000.
    23 Jan 2012, 09:28 PM Reply Like
  • It is called a value trap.
    23 Jan 2012, 09:29 PM Reply Like
  • In all seriousness, when they espouse such contentions, are they do they account for inflation, equity offerings/dilution, reduced market caps, etc.? I suspect not.
    23 Jan 2012, 09:38 PM Reply Like
  • 2012 The year of the banks! If Obama loses it will be an even better year for stocks.
    23 Jan 2012, 09:39 PM Reply Like
  • Lets face it, comparing 2012 to "norms" is ridiculous.


    Trillion dollar deficits, crony capitalism, bailouts, loss of freedoms and liberties - those things weren't present when comparing to events 20 years ago.


    Buy solid companies paying out cash to shareholders. Everything else is a crapshoot (and lets face it the whole macro environment is a crapshoot since government is involved in everything these days).
    23 Jan 2012, 09:39 PM Reply Like
  • Basically buy what the government printed money is going to buy... front running the Fed is the ONLY trade
    23 Jan 2012, 10:04 PM Reply Like
  • There is no "normal" in the market - there never has been. Once people realize that the so-called "normal" is a moving target then perhaps they will make better decisions. Not betting on it though.
    24 Jan 2012, 12:05 AM Reply Like
  • Yes there are lots of macro problems, but, like a lot of things, it works until it doesn't -- stay nimble.


    Also, don't fight the Fed. You don't have to agree with them, but you do have to understand their impact, and in the short-term (the next year or so), that is to give free money to banksters and prop up equities.


    I don't think 2012 will be another crash year. 2013 maybe, but not 2012.
    23 Jan 2012, 10:17 PM Reply Like
  • Yeah, after a couple of hits of acid, you can really see stocks being cheaper than, say, 2009, 2010 or last year when they were below 1,100. If you don´t understand why 1,315 is cheaper than 1,100 then you haven´t had enough Kool-aid.
    23 Jan 2012, 10:20 PM Reply Like
  • Guess the key is to realize that the stock market (prices) may have nothing to do with fundamentals. With ultra low interest rates savers really should be looking at high quality dividend paying/growing companies.


    Chart-wise we are over the late October highs whether we deserve to be or not and the S&P is close to giving a 'golden cross'. Eyeballing the chart with my one remaining good eye does seem to point to 1400-1425 but whether we'll hit that in the 11+ remaining months of this year is a different story. JMHO.
    23 Jan 2012, 10:22 PM Reply Like
  • DOG is looking pretty cheap right now!! If the Dow closes over 13,000 it will be very, very difficult to resist moving a sizable amount of cash into that and parking it for awhile.
    23 Jan 2012, 10:35 PM Reply Like
  • Elect a Democratic President if you want the stock market to go up. Look at the empirical data if you don't believe me.
    23 Jan 2012, 10:36 PM Reply Like
  • Not statistically significant nor probable. Quite often presidents are elected on the state of the current economy. Yet presidents have little - if any - real control over any economy (though they can impede recovery, as is the present case).


    Economies run in cycles, and elections are usually 2 to 4 years out of phase with what the economy would do anyway. So basically what you have to do is look at the previous term, not the current one.
    24 Jan 2012, 12:16 AM Reply Like
  • I think Wall Street needs to change the playbook. Euro strengthens market goes up. QE market goes up. China eases bank reserves market goes up. Main street adds more jobs market does nothing. Whose side are they on. Sell 1 month beofre may and go away. Buy in October like the best for a christmas rest.
    23 Jan 2012, 10:38 PM Reply Like
  • It could be worse -- up until recently, the market used to go DOWN on a good jobs report.
    23 Jan 2012, 10:41 PM Reply Like
  • Ever lower interest rates and a bunch of bubbles held this thing up.
    Gotta wonder what will "work" once rates can't/won't go considerably lower.
    23 Jan 2012, 11:00 PM Reply Like
  • I love this thread. Please keep adding to it.


    run for your lives.
    save yourselves
    sell, sell, sell
    go on.
    sell, sell, sell
    retest the March '09 lows here we come.
    sell, sell, sell
    Armageddon is nigh. Europe = hopeless. US = broke
    sell, sell, sell


    23 Jan 2012, 11:50 PM Reply Like
  • All this negativity makes me want to BUY BUY BUY
    24 Jan 2012, 12:17 AM Reply Like
  • in this market the dips are your friend
    sell your garbage into the strength and upgrade.


    24 Jan 2012, 01:12 AM Reply Like
  • Upgrade into stocks that will fall another 15-25% when Europe enters a deep recession dragging China and the US with it? How much do you make on those "high quality" 5% yielding stocks when the underlying asset goes down 25%?
    24 Jan 2012, 02:12 AM Reply Like
  • How much do you make on those "high quality" 5% yielding stocks when the underlying asset goes down 25%?


    30%? haha, not so good at math. but the idea is to not worry about market ups and downs with good cash paying value stocks, right? because eventually, the good ones come back up, even if it takes one or two years. in the meantime, you have income. And obviously better yields. theoretically.
    24 Jan 2012, 06:08 AM Reply Like
  • It's easy to discern in this thread who's perplexed, even angry, about being wrong on market direction. Often, when that occurs, people become even more strident in their negativity, rather than questioning their original premise.
    24 Jan 2012, 06:16 AM Reply Like
DJIA (DIA) S&P 500 (SPY)