waldipup

Stock Market Valuation Requires a Long-Term View

What's the point of historical price to earnings perspective.

(Or as Obama , the guy who's gonna save us calls it , "profits to earnings" ) .

Instead , look at historical debt levels - governmental ,

corporate , and personal, and as well the percentage of this as foreign debt .

Then come back and talk about historical PE levels.

Are We in a New Bull Market Now?

Since the market "leads" in a turnaround , the concept of a new bull market assumes that general economic conditions are going to turn back up.

The bailout , though ultimately a certain disaster , may temporarily create conditions to bouy up the economy ,

Making technical buying at lows potentially profitable during an artificially created government upswing.

But if so , be wary for the downside once this artificial prop has run its course.

Last Gasp of a Doomed Currency

To summarize things in what I feel is a reasonable perspective -

The debt accumulated over the past decade or so , which will continue to rise , cannot be repaid.

As a result , Peter , myself , and many others recognizing this have looked to hard asset investments as a safety/profit vehicle in this scenario.

But what we have not factored in to the "certainty" of our calculations is the timing.

For how long can a strong government continue unabashed , even if financially untenable?

Thus the recent downdraft in gold , resource stocks , etc.

The problem is that everyone (correctly) can ascertain the fundamentals ,

But NOBODY can ascertain the timing - though many think they can.

This recent downdraft proves that.

ALL the resource guys are in shock.

Maybe the debt burdens will cause the dollar to disintegrate next year -


OR MAYBE IN TEN YEARS!

Nobody freakin knows .

So balanced investing , including partial profit taking , is necessary.

Another thing that "Nobody Freakin Knows" -

Will a $ breakdown create "Blood In The Streets" ,

As some hypothesize ,

Or rather a slowly lessening of standard of living , eventually tapering off at a lower plateau than now?

The latter would allow for a gradual accepting of "less" ,precluding the scenario of an environment prone to disorder.


Remember , we've come a long way from the lifestyle of the Kramdon's in "The Honeymooners" , and yet they were able to accept their level of lifestyle .

We may be just TOO BLOATED , and a peg down wont hurt.

Real Estate values will eventually taper off and find a bottom , and that market will eventually stabilize at lower levels as dictated by its own internal supply/demand characteristics (likely helped by less supply coming on to the market) ,

But this wont help the problem of unrepayable (and continuously increasing) debt ,

And so Real Estate stabilization WILL NOT be the key to better times -

Rather just to a stable Real Estate market.

2 Homes For Price Of 1 Ripoff

And I suppose if anyone buys this deal , they can then demand to be bailed out by the gov't. because they were mislead?

K Mart ad :

20% off the "Regular" price .

Whose "regular" rice?

THEIR OWN!

Lets bail out the guy who bought the lawnmower cause his mommy is the govt.

The free market is based on deals.

You must understand what you are doing , or get help if you don't.

That's what Warren Buffet does.

Barring legally fraudulent practices being involved - So What?

Note :

This type of news "bit" is not uncommon -

What a guy will do to get cheap gas ,

What a builder will do to move slow property.

Sorry , no outrage here , and no conspiracy.