dancing diva's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/20369/comments http://seekingalpha.com/article/179080-the-bulls-are-getting-it-backwards?source=feed#comment-815425 815425
Rear view analysis is usually perfect; it's much harder to see into the future. Those who summarily dismiss the potential for self sustaining growth are as guilty as those who dismissed the potential for a crash in 2007.

One thing I do know, however. Many of the bears appear to be fighting the last war. Inevitably that's a recipe for failure.]]> Mon, 21 Dec 2009 07:12:30 -0500
Rear view analysis is usually perfect; it's much harder to see into the future. Those who summarily dismiss the potential for self sustaining growth are as guilty as those who dismissed the potential for a crash in 2007.

One thing I do know, however. Many of the bears appear to be fighting the last war. Inevitably that's a recipe for failure.]]> http://seekingalpha.com/article/163588-leading-economic-indicator-isn-t-indicating-the-real-recovery?source=feed#comment-692894 692894 Sun, 27 Sep 2009 09:38:45 -0400 http://seekingalpha.com/article/149484-s-p-500-which-earnings-are-most-relevant-to-its-performance?source=feed#comment-663853 663853 Thanks for your reply.

While I would normally agree lower interest rates would significantly boost the S&P, as they have done historically, I really do think this time it's different. That's because banks are still not lending freely and credit is tight, despite the low interest rates. In the past the low level of interest rates ( which implies easy credit conditions) are bullish for the stock market because it allows busineses to expand freely. That's certainly not the case this time.

The reason I suggested the line should be shifted downward (and a dummy variable used for the clearly outlying data points such as near the 2000 stock market peak) that at least in the next 10-20 years it's doubtful that p/e's will get that stupidly high. Those data points shift the regression line up considerably.

Using the unemployment rates makes sense to me. Typically p/e's are highest during trough earnings, and trough earnings correlate well (with some time adjustment) to the highest rates of unemployment.]]> Sun, 06 Sep 2009 09:50:42 -0400 Thanks for your reply.

While I would normally agree lower interest rates would significantly boost the S&P, as they have done historically, I really do think this time it's different. That's because banks are still not lending freely and credit is tight, despite the low interest rates. In the past the low level of interest rates ( which implies easy credit conditions) are bullish for the stock market because it allows busineses to expand freely. That's certainly not the case this time.

The reason I suggested the line should be shifted downward (and a dummy variable used for the clearly outlying data points such as near the 2000 stock market peak) that at least in the next 10-20 years it's doubtful that p/e's will get that stupidly high. Those data points shift the regression line up considerably.

Using the unemployment rates makes sense to me. Typically p/e's are highest during trough earnings, and trough earnings correlate well (with some time adjustment) to the highest rates of unemployment.]]> http://seekingalpha.com/article/160181-what-if-it-is-a-v-recovery?source=feed#comment-663836 663836 Sun, 06 Sep 2009 09:32:35 -0400 http://seekingalpha.com/article/149484-s-p-500-which-earnings-are-most-relevant-to-its-performance?source=feed#comment-653183 653183
Obviously the S&P was too highly valued in the 2000 (1999-2002?) period relative to NIPA profits and that shifts the line upward. You have these dates circled on the graph. What if you ran the correlation again using a dummy variable for the obvious outlyers (including those two below the line in graph 2 as well)? That would shift the regression equation line downward by ?. Just eyeballing it that could reduce the S&P fair value by at least 100 points, perhaps more.

Hopefully you will see this comment and reply. Thank you again for a great article.]]> Sun, 30 Aug 2009 10:11:58 -0400
Obviously the S&P was too highly valued in the 2000 (1999-2002?) period relative to NIPA profits and that shifts the line upward. You have these dates circled on the graph. What if you ran the correlation again using a dummy variable for the obvious outlyers (including those two below the line in graph 2 as well)? That would shift the regression equation line downward by ?. Just eyeballing it that could reduce the S&P fair value by at least 100 points, perhaps more.

Hopefully you will see this comment and reply. Thank you again for a great article.]]> http://seekingalpha.com/article/159041-cheapest-s-p-500-stocks?source=feed#comment-653082 653082 Sun, 30 Aug 2009 08:57:35 -0400 http://seekingalpha.com/article/158880-japan-s-past-our-future?source=feed#comment-652380 652380 www.bloomberg.com/apps...]]> Sat, 29 Aug 2009 11:47:55 -0400 www.bloomberg.com/apps...]]> http://seekingalpha.com/article/148339-the-inflation-deflation-debate-and-china-s-commodity-carry-trade?source=feed#comment-593666 593666
When the Chinese economy moves again on free market forces wake me up.]]> Sun, 19 Jul 2009 09:50:02 -0400
When the Chinese economy moves again on free market forces wake me up.]]> http://seekingalpha.com/article/149598-perhaps-there-are-unseen-green-shoots?source=feed#comment-593640 593640 Sun, 19 Jul 2009 09:31:04 -0400 http://seekingalpha.com/article/149484-s-p-500-which-earnings-are-most-relevant-to-its-performance?source=feed#comment-593056 593056
One comment/criticism. You are using twenty years of data for the correlation, and in that period credit became easier and tax policy better for the investor and corporations, with leverage also increasing.

Going forward that will certainly not be the case. If you can find longer history which includes more adverse conditions (credit, taxes, etc) and the correlation still holds - then you have a winner!

My gut says that the more adverse credit and tax situations should slow corporate profits and a market unwillingness to pay the multiples seen during that 20 year period you studied. Hence, the correlation should break down. But thanks for the heads up; I'll pay more attention to NIPA corporate profits in the future.]]> Sat, 18 Jul 2009 13:25:14 -0400
One comment/criticism. You are using twenty years of data for the correlation, and in that period credit became easier and tax policy better for the investor and corporations, with leverage also increasing.

Going forward that will certainly not be the case. If you can find longer history which includes more adverse conditions (credit, taxes, etc) and the correlation still holds - then you have a winner!

My gut says that the more adverse credit and tax situations should slow corporate profits and a market unwillingness to pay the multiples seen during that 20 year period you studied. Hence, the correlation should break down. But thanks for the heads up; I'll pay more attention to NIPA corporate profits in the future.]]> http://seekingalpha.com/article/71498-have-we-bottomed-yet?source=feed#comment-147385 147385
Additionally, you suggest picking bottoms in beaten up stocks because you have no confidence in the stock markets bottom and think they would fall less? If you have no confidence, just stay out.

Remember, traders/investors who try to pick the top or bottom of the market are called heroes - because they are the first to perish.

PS - I am long crox (and have been buying it for the past three weeks), but on valuation. There are plenty of cheap plays around. Rather than this inane article, do you homework and don't waste our time with stupid generalities.]]> Wed, 09 Apr 2008 00:04:23 -0400
Additionally, you suggest picking bottoms in beaten up stocks because you have no confidence in the stock markets bottom and think they would fall less? If you have no confidence, just stay out.

Remember, traders/investors who try to pick the top or bottom of the market are called heroes - because they are the first to perish.

PS - I am long crox (and have been buying it for the past three weeks), but on valuation. There are plenty of cheap plays around. Rather than this inane article, do you homework and don't waste our time with stupid generalities.]]> http://seekingalpha.com/article/70937-stock-valuations-on-the-rise?source=feed#comment-137106 137106
The s&p p/e is high because the "e" in both the financial and consumer discretionary areas have fallen, and these two sectors make up about 29% of the s&p (as of Sept 2007 although it's probably lower today). When one takes a look at the other sectors, where earnings are actually growing because they are heavily tied to the world export market, p/e's are not particularly high on a historical basis and in most cases are lower than a year ago. This was especially true before the latest rally.
]]> Sun, 06 Apr 2008 00:55:24 -0400
The s&p p/e is high because the "e" in both the financial and consumer discretionary areas have fallen, and these two sectors make up about 29% of the s&p (as of Sept 2007 although it's probably lower today). When one takes a look at the other sectors, where earnings are actually growing because they are heavily tied to the world export market, p/e's are not particularly high on a historical basis and in most cases are lower than a year ago. This was especially true before the latest rally.
]]> http://seekingalpha.com/article/68577-new-york-times-reports-the-recession-is-here-what-a-shock?source=feed#comment-126990 126990
I ascribe to the principles "when they're crying you should be buying" and "selling when they are yelling". I've been buying but plan to sell some call options on the next rally - just in case.

There are lots of tears flowing now. Perhaps someone should come up with a kleenex index as a way to interpret the bottom.

]]> Sat, 15 Mar 2008 20:20:39 -0400
I ascribe to the principles "when they're crying you should be buying" and "selling when they are yelling". I've been buying but plan to sell some call options on the next rally - just in case.

There are lots of tears flowing now. Perhaps someone should come up with a kleenex index as a way to interpret the bottom.

]]> http://seekingalpha.com/article/68581-bearish-bloggers-too-optimistic?source=feed#comment-126988 126988 Sat, 15 Mar 2008 20:12:10 -0400 http://seekingalpha.com/article/66815-wheat-boom-an-indicator-of-inflation?source=feed#comment-124545 124545
Grains, feeds and vegetable oils should be fuel for the body, not cars.]]> Mon, 10 Mar 2008 01:58:14 -0400
Grains, feeds and vegetable oils should be fuel for the body, not cars.]]> http://seekingalpha.com/article/59454-bear-stearns-looking-decidedly-cheap?source=feed#comment-109322 109322
That argument was also made with the homebuilders several months ago. Look how well that worked.
]]> Wed, 09 Jan 2008 21:45:25 -0500
That argument was also made with the homebuilders several months ago. Look how well that worked.
]]> http://seekingalpha.com/article/57864-technical-no-no-s-p-500-s-50-dma-close-to-crossing-below-its-200-dma?source=feed#comment-106343 106343 Fri, 21 Dec 2007 03:18:53 -0500 http://seekingalpha.com/article/55697-did-i-just-see-a-dead-cat-bounce?source=feed#comment-103695 103695
No one denies there is a problem in either the credit market or the economy. In fact, the market had been voting with its pocketbook all month, with the downside accelerating after the Fed's statement "the risks are balanced". Well, you and I and everyone else except the Fed realized the risks were definitely not balanced. However, this weeks realization that the Rip Van Winkle Fed had finally woke up gave the market a reason to rally for the first time in a while. Like an alcoholic can't be cured until he acknowledges his dependency, neither can the economy be cured until the Fed realizes there is a problem.

Will the economy be cured by a 1/4 or 1/2 point rate cut? No. Will I short this market? No way! The reason is that most stocks are not overpriced and with the Fed working with rather than against the economy there is more hope for the future. Sentiment is far more important than the short term gdp level for the direction of the stock market.]]> Sat, 01 Dec 2007 19:01:51 -0500
No one denies there is a problem in either the credit market or the economy. In fact, the market had been voting with its pocketbook all month, with the downside accelerating after the Fed's statement "the risks are balanced". Well, you and I and everyone else except the Fed realized the risks were definitely not balanced. However, this weeks realization that the Rip Van Winkle Fed had finally woke up gave the market a reason to rally for the first time in a while. Like an alcoholic can't be cured until he acknowledges his dependency, neither can the economy be cured until the Fed realizes there is a problem.

Will the economy be cured by a 1/4 or 1/2 point rate cut? No. Will I short this market? No way! The reason is that most stocks are not overpriced and with the Fed working with rather than against the economy there is more hope for the future. Sentiment is far more important than the short term gdp level for the direction of the stock market.]]> http://seekingalpha.com/article/55782-has-anything-really-changed-in-the-last-two-days?source=feed#comment-103694 103694
The market needs a proactive Fed not a reactive Fed. This week gave the first glimmer of hope it will move in that direction. As long as this becomes a reality stocks will be well supported. You forget this is not like 2000 when the market multiple was nearly double the current level. There is no reason for a stock market collapse unless there is an economic one. And there will not be one if the Fed and US gov't do their jobs.]]> Sat, 01 Dec 2007 18:36:13 -0500
The market needs a proactive Fed not a reactive Fed. This week gave the first glimmer of hope it will move in that direction. As long as this becomes a reality stocks will be well supported. You forget this is not like 2000 when the market multiple was nearly double the current level. There is no reason for a stock market collapse unless there is an economic one. And there will not be one if the Fed and US gov't do their jobs.]]>