M dub

Four Commonsense Clues to a Genuine Market Bottom

Not a bad list. I don't necessarily agree with book value, as someone who has analyzed in detail thousands of financial statements, this is a broad market thing but anyone who has mae a lot of acquisitions (i.e.) has a lot of goodwill, capitalized this and that etc and you can writeoff book value and ride it all the way down. That is really a case by case analysis. Given how high valuations have been its nice to at least see people thinking about absolute valuations in general - but free cash flow is usually the beter way to go IMHO - and this is definitely one of those times.

The aunt judy contrarian signals i really agree with - and we aren't close to being there yet. All the expert (ie dumb) financial planners on TV are telling boomers to wait it out. The market still has a world of pain to inflict on this aging herd who are still confident they have a 10-20 year outlook. When the S&P hits 650 they may start puking en masse, it will be time to start paying attention. Once they have said "uncle" i'm in.

The one thing you have to think about - is that this economic situation will be a drawing line between the haves and have nots - and i'm speaking of debt. So in a sense there will be two "equity markets" to think about going forward. We have not seen debt like this - personal, corporate, government - and it is possible the bottom may not look like what we are used to seeing. I've dealt with LBO financing a lot and the one thing i will say is that it takes a long time once you are full on debt and start to have stuff blowing up around you, to get that down takes a long time and your competitors start leaving you in the dust if not smelling blood and starting an all out assault. A list of the nonbank S&P 500 who have debt to cash flow under and over 3.0 or so and no near term refinancing issues -now that would be a good index to track.

We haven't even started with stories about potential problems with China funding our gov't bailout sprees, war debt and trade deficits. No one is even thinking about inflation yet - but are printing money like its free.

Seems to me we still have a lot of mental baggage to work through and haven't even booked an appointment with the shrink yet. If I would corrolate to the Kubler Ross scale en.wikipedia.org/wiki/..., i'd have to say john q public is nearing def con 3.