Mike Carr

Long Term View of the Dow

You're right - there were no Ipods seventy years ago. But there have always been new technologies. Seventy years ago, television was ten years old and radio was changing America. Trains, canals, autos, bowling alleys and other fads have created bubbles through history. Emotions, and people, never change so it is important to look at history.


On Mar 16 10:29 AM Prudent Man CFA wrote:

> How many Ipods, cell phones, laptops, etc. were there seventy years
> ago?
>
> For one to believe that market perceptions are static is absurd.
> To geometrically attempt to compare now with several generations
> ago may be comforting but hardly useful or logical.

Assessing the Market's Current Valuation

They are 'penny stocks' that don't make money and eventually go out of business - taking investor dollars with them.


On Feb 18 02:34 PM DavyJ wrote:

> Mike, What do 1200 companies that have zero sales do? I.e., how do
> they make money and how do they stay in business?

Assessing the Market's Current Valuation

A lot of stocks are trdaing below their their average P/S ratio. And more than 1200 stocks reported zero sales in the past 12 months - seems interesting to me that so many stocks exist given all the emphasis on fraud in teh current market. Could be indicating that investors still seek risk?


On Feb 17 08:31 PM DavyJ wrote:

> You said: "Using the P/S ratio to measure fair value, we find that
> 8,211 stocks have reported at least some sales in the past twelve
> months. (As an interesting trivia note, there are more than 1,200
> listed securities with no sales at all in the past year.)"
>
> I ask: Would you please read that again, and again, and even again
> if necessary.
>
> Then tell us what you really meant to say.
>

New Home Prices vs. Median Income Chart

What the chart shows is that when I go to get a mortgage, the bank looks at my income. Traditionally, good credit meant I could get a mortgage for 3-5x my annual income and maintain the standard underwriting ratios. Remember when they wanted the payment to be 25% or less of my income? This would be the ratio of 4 that that squiggly red line was at or below for decades.

It got out of line with zero down, no-docs. Now, we are very close to the historic norm which would indicate prices are nearing a bottom.

Bad Economic News Does Not Mean It’s Time to Sell Stocks

The lower chart shows the average recession. The market bottoms halfway through the recession. Since they have averaged 10 months, the bottom occured at month 5. We may have seen a bottom in Nov, which would say that this recession still has a ways to run. But the market should turn higher before unemployment peaks and the recession ends.

The bottom chart was illustrative, not tradable.

The January Effect Explained

I am trying to work on that actually and hope to have it within a week.
Thanks, Mike


On Dec 25 12:35 PM PeakOiler wrote:

> What I'd really like to see is another dimension: prior year where
> market gained, prior year where market dropped <=5%, prior year where
> market dropped > 5%. I would expect the January effect to be larger
> in the latter category, and weakest in the first category. Michael,
> would this be possible for you to compute? Thanks for the article.