User 231215

Why a Market Crash Doesn’t Matter

i think this is pretty siIIy.....if the entire market tanks whatever you own generaIIy tanks with it.....that is obvious.....and then his caveats.......


On 12/31/1999 the S&P 500 was at 1469 (green arrows) and was overvalued trading at more than 26 times earnings of $55.83 (red arrow.) Therefore, since the normal P/E ratio of the S&P 500 has been 17.5 for the past 20 years, future poor performance should have been expected.
The rate of change of earnings growth for the S&P 500 of 2.9% (Red circle), was not strong enough to generate a positive return from such a lofty valuation.
From calendar year 2000 to the current, we suffered through two recessions which created above-average cyclicality of earnings for the S&P 500. Clearly, earnings drive the long-term movement of stock price.

cIearIy there is nothing of the sort! go to crestmont research and see the Iong term charts that show stock market movements over Iong periods of time that have NOTHING to do with PE ratios or any other stock vaIuation metric! the stock market is driven by specuIation and manias...and so are the individuaI stocks that make up the indexes........not fundamentaIs Iike earnings or "vaIuations" what ever that means......can you predict irrationaI human manias and specuIation? maybe but not from the nonsense this authors spouts......i wouId say good companies do better than bad in bear markets.....that much is true.....to Ieap to his concIusion from this simpIe observation to "market crashes don't matter" is just pIain siIIy......

Stocks to Watch as Market Leadership Changes Hands

whoops! "if you want to make money you better get into these stocks like amazon and netflix!" isn't this a bit late as an entry point? time to buy was 6 months ago at the march low! anyone sticking their necks out now after a 60% run up in the market is an absolute fool.....the economy sucks, its getting worse, not better (what part of the word UNEMPLOYMENT don't you understand?), and all technical indicators and pundits who aren't crazy bulls are warning of a severe correction! i am not long these stocks....if anything, now is the time to short amazon! bullish mania is an amazing creature......it still lives! as this article attests.....