Dividends Anonymous

Four Commonsense Clues to a Genuine Market Bottom

Good article. The only problem with P/B is that if you're not sure what the liabilities are actually worth or if the company has off balance sheet liabilities not publicly disclosed than you can get into some serious trouble. Many sectors have been trading below P/B or NAV for quite some time now and while the broader market might be an indicator I think the S&P with strong financial weightings skews that result somewhat. I would caution against P/B as a valuation for a market bottom and continue to look to equities who continue to increase their book value by meaningful growth rather than growing the business through equity or debt.

My Take on This Very Risky Market

Good rational presentation. I wish more authors here took the time to give candid articles rather than pumping personal positions or discussing the same mundane topics over and over again.

I look forward to reading more of your insights Larry.

Think of These as Short-Term Troubles

I view this as an incredible buying opportunity for a long-term investor. Yes be diversified among asset classes, but we haven't seen a decline across the board such as this my anyone's recent memory.

I'll continue to add to shares that are cheap on any measure of forward P/E, hold them for the dividends and DRIP them over a long period of time.

Fear and Greed: Premise for Capitulation and Overreaction

What's so wrong with fear & greed? It creates volatility, which creates mispricings and as a value investor I look forward to those opportunities.

Emotions throw both good & bad stocks in different directions at times and creates attractive entry positions for a long-term investor. It's much easier for a retail investor to move within the market than managers of large professional equity.

We haven't seen volatility in quite some time and when investors haven't gotten used to something they generally fear it immediately and over-react.

Sentiment Overview: Cash is King

Cash is King only if you plan to take advantage of depressed market & stock valuations. I know of a lot of people sitting in 30-40% cash at this moment who don't plan to get back in until they see some real improvements. If history is any indication those movements could happen all in one day where that amounts to the entire yearly gain of an index, stock or sector.

The U.S. Banking System is Effectively Insolvent

I don't think anyone should necessarily discount Bernanke's ability to anticipate the true issues of this crisis. As an academic he's very capable of understanding what is wrong, but fixing it becomes a political issue now that he finds himself in the position of the Fed Chair.

Liquidity is the problem and the fact that no one wants to lend to anyone else because they're not confident that they'll still be standing tomorrow.

All this turmoil is horrible for the markets, investors and taxpayers, but its needed. You need to clean the wound before it can start to heal and what we're going through right now is a great big popping of an abscess!! YUCK!

The corporations that emerge from this period will be stronger than likely what we've seen for a long time. When that occurs no one knows, but we're reaching complete capitulation here so one has to wonder that a bottoming is occuring if not inevitable very soon.