willynill

Kass: 20 Predictions for 2010

Balderdash!

More Weakness, More Volatility

Wrong, the volume was much higher Friday than it was Thursday.


On Oct 31 09:49 AM YoYoMama wrote:

> Actually, the volume on this sell-off was pathetically low, a sign
> that this rally still has legs. Sorry, your shorts will have to wait
> a little longer.

Funding a Rally Extension

The author said there will be an additional six weeks of "funny money" going into the market, but then watch out as the funny money runs out. It's going to be an interesting fall! (autumn)


On Sep 20 08:47 PM beaux wrote:

> Interesting analysis. Well done. I think you may be on to something.
>
>
> But it must be said that the posts following the article are so consistent
> in their vitriol and cynicism for this rally one could be forgiven
> for concluding that they find themselve among those who have missed
> this move (or have even played it from the short side) and are experiencing
> an associated emotional reaction. It reminds me of the emotional
> outbursts that the longs expressed on the meltdown. Perhaps melt-ups
> provoke the same responses.
>
> Could it be that the posts, as a contrarian indicator, suggest that
> the rally may indeed have some way left to run?

Indexes Could Test Support Levels Today

David, I'll double check this, but I think the earnings are the latest 12 month earnings of the stocks currently in the index. Earnings of stocks no longer in the index are not included.


On Sep 01 07:49 PM David Van Knapp wrote:

> The high PE right now is a result of BOTH current prices and trailing
> earnings. That is obvious from the calculation: (current price) divided
> by (trailing earnings) = PE.
>
> Thiazole is correct that the PE ratio is based on past earnings of
> stocks that are no longer in the index. S&P has replaced more
> than 40 companies in the past 12 months. Further , the current price
> used in the calculation is the current price of the stocks in the
> index now.
>
> So the PE is a mish-mash. Each investor will need to decide how relevant
> this number is to forward-looking investment decisions. I am with
> thiazole, it is not very relevant. There are plenty of other valuation
> metrics available than this historically aberrational PE.

Indexes Could Test Support Levels Today

thiazole, I don't follow your logic on this one. The ridiculous PE is a RESULT of this huge rally. Yes, it is a trailing PE, but it is a measure of the prices now. In order for the PE to get down to, say, 20 (Graham and Dodd would never buy a stock with a PE higher than 20), the earnings would have to increase by a factor of 6 (500% increase!) if the price stays at this level. I'm betting on a big drop in the P, not such a big rise in the E.


On Sep 01 03:52 PM thiazole wrote:

> I figured that is what he meant, but it obviously doesn't work, does
> it. It would have suggested that you miss this huge rally and that
> it was much better to own before the crash. If you use trailing P/E
> as an indicator on whether to buy or not, you are using backward
> looking data to make a purchase that you plan to hold in the future.
> That explains why it gives the wrong signal. What do I care that
> GM, Ford, Chrysler, AIG, etc, etc, lost billions in the 4th quarter
> of 2008? What does that have to do with what they will do in 2010?
> You do realize that the ridiculous P/E ratio that you quote is a
> result of what happened in Q4 08 and not what is happening right
> now, right? Hell, the companies in the S&P right now aren't even
> the same companies that were in the S&P back then - the worst
> companies are gone, but they are still being counted in the trailing
> P/E...

Indexes Could Test Support Levels Today

I think he means expensive relative to earnings. With the S&P PE now at over 130, I think he is correct.


On Sep 01 11:45 AM thiazole wrote:

> If you really believe that stocks are more expensive now than in
> 2007, it exposes a very serious flaw in your price analysis.

The Teddy Bears' Picnic: Predicting a Market Crash That May Not Come

Even teddy bears come home after a day in the woods, because they are tired little teddy bears.

Barry Eichengreen Is Wrong: We Need to Pass a Bigger Stimulus

Let me echo Barry Eichengreen: "A second stimulus simply is not in the cards...." It won't happen.

Effects of the Stimulus Package: Felix Salmon Is Uncharacteristically Wrong

Brad, you seem to be agreeing with those who say the recovery will take as long as the FDR "solution" or the Japanese "lost decade(s)".

Was Friday's Rally the Start of Something Big?

Don't you think it was just end-of-month window dressing by the funds? I don't expect to see any lasting effect.

Firming Commodity Prices Signal Economic Stabilization

Is paladium a play now after today's 60 Minutes story on "cold water fusion"?

America: Is This the End of an Era?

yada yada is not completely wrong, but his use of physics to describe economic conditions is wrong. He assumes that the economic world is a zero-sum game, but it is not. If he had taken some more economics courses, he would have learned that income is a function of consumption--reduce consumption and reduce income (lose-lose). If consumption is increased, income is increased (win-win). That's why China is trying so hard to get its citizens to consume more, but they won't--they are savers, at least the older generations are. Think about it: when people consume less, businesses sell less; when businesses sell less, they employ fewer people; with fewer people employed, the standard of living falls for everyone and the government collects less in tax revenues requiring higher tax rates. This is a downward spiral.

As a Discounting Mechanism, the Market Will Rebound Before the Economy

Yup, it is a discounting mechanism. The price today is the present value of all future cash flows that it KNOWS about, discounted at a rate consistent with the risk. I think PrudentMan is really saying that the market is not efficient, and I agree with that.

Market Rallies on Geithner's Appointment: Why?

If the rally was due to short covering, why was the short covering occurring? Answer: Because the information about the Secretary of Treasury was sending a signal that Obama would not be as leftist as feared, and that was good news which may be spilling over into Monday's market, along with other "good news".

5 Reasons Stocks Will Keep Falling

Too many of you are agreeing with the accountant. An accountant deals with the past; he reports financial data that is already history. Markets are all about the future and what looms ahead as a crisis or a cure. Forget about the past; get ready for what's coming next.