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John Schuh

John Schuh
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  • "I am amazed every day at this rally," says Jim Cramer. "It's very unusual to have the cyclicals, the techs, the financials and the drugs all move at once. It's reminiscent of other times where we saw a radical revaluation in the market." While others may see it as signs of another bubble developing, Cramer sees little evidence. "The S&P is only at 15 times earnings," he notes, and the bond market continues to be a place where you can't get any return. This rally Cramer says, is for real. [View news story]
    There are some cheap stocks out there but an investor should be picky about what they pick up. They need to do research and know what they buy well. Government intervention in currencies will eventually equalize and be made right by the market.

    The vast majority are trading at historically high levels in relation to future earnings. So the risks are high on most companies with current PE's over 20x. There's always a few cheap stocks but finding a company that has real value is always a challenge....even more so today.

    I refuse to pump additional hype out on the market. They should be aware of the risks, even in US equities...especially with trying to predict future PE ratio's. Growth is not a sure thing and people can cut back on what they spend. Future PE can change from being trading 15x earnings to 30x earnings or more within a blink of an eye. Companies future PE's can change quickly when people stop buying or delay buying because they lose their job or forced into a lesser paid one, or cut out unneeded expenses.

    Equities are easily in a bubble when companies or people have too much borrowed, companies have been priced up to have a forward PE of 15x earnings while having current PE's around 20x, and if the consumer pulls back. *sigh* Bad things happen. When a company is at 20x earnings and suddenly is valued at 30x future earnings and the stock corrects to them having forward earnings of 15x or 10x in value. That could be a massive drop for the company. Companies are priced for perfection and if they disappoint, we really could be in trouble. But no worries if they can continue to beat or maintain those levels. I would say the chances of that happening are very slim.

    Many of the US companies also have big exposure to Europe among other foreign countries. If those countries struggle, so will those stocks.

    If we have high inflation, companies are also in big trouble. Just Google hyperinflation. Everyone is hurt. No matter what the fed does from here, we are bound to get hurt. Too much is borrowed and they can't keep this up for much longer.

    I'm not saying, don't have stocks. What I am saying is be very picky and know your company along with their balance sheets.
    Apr 13 05:44 AM | 2 Likes Like |Link to Comment
  • "I am amazed every day at this rally," says Jim Cramer. "It's very unusual to have the cyclicals, the techs, the financials and the drugs all move at once. It's reminiscent of other times where we saw a radical revaluation in the market." While others may see it as signs of another bubble developing, Cramer sees little evidence. "The S&P is only at 15 times earnings," he notes, and the bond market continues to be a place where you can't get any return. This rally Cramer says, is for real. [View news story]
    You don't think there are bubbles that are happening right here, right now? That really blows my mind. So we don't have a bond bubble? I am sorry you don't see a bubble in Treasury bonds, Municipal bonds, along with what is almost 17 Trillion dollar government debt. The government cannot continue to spend and prop up the markets like it has for forever. Currently stocks are priced for perfection, you don't think the market will slide when companies miss a quarter or two? When you think that this time is an exception or when this time the market going up everyday cannot come back down is the time to get out. You can party like it's 1999 but you're 2000 will come. (a little NASDAQ reference)

    If you are fully invested and you don't see the disaster coming, I suppose you'll one that will be hardest hit. Good luck in the future.
    Apr 12 10:34 AM | 1 Like Like |Link to Comment
  • "I am amazed every day at this rally," says Jim Cramer. "It's very unusual to have the cyclicals, the techs, the financials and the drugs all move at once. It's reminiscent of other times where we saw a radical revaluation in the market." While others may see it as signs of another bubble developing, Cramer sees little evidence. "The S&P is only at 15 times earnings," he notes, and the bond market continues to be a place where you can't get any return. This rally Cramer says, is for real. [View news story]
    I remember when the last crash happened the forward P/E of the market indexes were about 15 times earnings or less but the current P/E was close to 20 times earnings. We are close to those same numbers.

    http://on.wsj.com/sXXWWp

    Dow Industrial: Current 16.28 Forward 13.05
    Dow Transportation: Current 20.91 Forward 15.55
    Dow Utility: Current 25.19 Forward 16.25

    Russell 2000: Current 34.88 Forward 16.10
    Nasdaq 100: Current 17.05 Forward 15.00
    S&P 500: Current 18.35 Forward 14.10
    Apr 12 04:06 AM | Likes Like |Link to Comment
  • Monster's Valuation Hinges On A Better U.S. Job Market [View article]
    The company's valuation just by shutting down and selling everything off would give a value of $7.53. Any good news will likely send the stock up near that value. You are correct on the assessment.
    Apr 11 09:11 PM | Likes Like |Link to Comment
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