Comments on: The reality of S&P 500 earnings

By: Aki_Izayoi

Aki_Izayoi — Sat, 15 Aug 2009 16:38:25 +0000

Oh, never mind… it says “round bullets show intrayear extremes”

By: Aki_Izayoi

Aki_Izayoi — Sat, 15 Aug 2009 15:31:15 +0000

Stock Trader…

to be nit-picky, what does “November 2008″ mean? Was this taken during the peak which the S&P 500 peaked when Obama was elected or during the panic low of November?

By: Mike

Mike — Sat, 15 Aug 2009 05:57:29 +0000

Thanks, Trader. I always liked those dot charts that Prechter puts together. I think after this bounce and deterioration in earnings we’re now back in the realm of Pluto.

Also, think about how inflated book value is right now: it is supposed to be what you can actually get in liquidation, but I think accountants are still marking to 2007, which is called “marking to model”.

By: Stock Trader

Stock Trader — Sat, 15 Aug 2009 04:59:35 +0000

Excellent article. Here is the long term picture that shows why stocks are over valued:

http://www.tradingstocks.net/html/near_bottom.html

Thanks.

By: ken

ken — Sun, 12 Jul 2009 01:44:18 +0000

The author sounds quite persimistic about the current market rally. I think even in 2009-2010 S&P 500 earning is fall to 2001-2003 level or slighly lower than that period, the market won’t fall fall below 600, needless to say, reach 200. I am wondering why the author doesn’t short the market if he is so sure it could fall below 500. Well, maybe he already did short the market when it was at 700 level and now become anxious to cover it back. Guys even the earning gets to 1995 level, the market will NOT fall below 400. So cheer up, the downturn is closing to its end. Fed is printing the money like crazy and those blue bucks have to get into the “economy”. You will be amazed how high the market will “bounce” back. This is not based on the economy hearlth but based on the theory that today’s dollar is weath much less than 7 years ago.

By: Mike

Mike — Thu, 18 Jun 2009 03:43:41 +0000

S&P 500 earnings in 2002 were $46, only 19% lower than the peak, and that was barely a recession. Even so, stocks were so overvalued that a nasty bear ensued. Stocks were nearly as overvalued in 2007, and are even more overvalued today, so this bear has a lot further to go.

I also see a parallel with the post-911 bounce. That one lasted 6 months, but covered most of its ground in the first several weeks. Both rallies started 18 months post-peak.

By: Anonymous 2

Anonymous 2 — Thu, 18 Jun 2009 03:00:32 +0000

Based on my timing system, the markets are where they were in Q1 2002 before the markets took a dive for the next 6 months .. I remember those days, I was laid off right after 9/11 and could not get a job … every headhunter I talked to said THEY were looking for a job for themselves!! It took me one year to get a job and I was living off of credit cards …. the sentiment was so horrible … the best buying opportunity passed in Sept/Oct of 2002 … So today the ratio of the Growth Rate to P/E is at the same level as it was in Q1 2002 … in fact the gap is much higher .. wish I could send you a chart to back up … but we are on the cusp of a massive downturn but I am not sure if it is going to happen now or in a month or so … We’ll see ….

By: anonymous

anonymous — Thu, 18 Jun 2009 00:40:42 +0000

Even now, the large investment shops still parlay the “low P/E” script based on op earnings. Perhaps they reason the crash has normalised the years of op earnings premium over reported earnings and wiped the slate clean. In reality, whatever suits their pockets they’ll sing it. As the saying goes, sing the song often enough and you begin to believe your own bS.