•Europe, U.S. Stocks May Be Destined to Drop Below March Lows: Chart of The Day

Discussion in 'Trading' started by ByLoSellHi, Jun 22, 2009.

  1. If there's a chart imbedded in this article, will someone please post it?

    For some reason my browser is filtering it if it's there.



    Stocks May Be Destined to Drop Below March’s Lows: Chart of Day
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    By David Wilson

    June 22 (Bloomberg) --
    U.S. and European stocks are destined to fall below March’s lows if bear-market history is any guide, according to Jim Reid, a strategist at Deutsche Bank AG.

    Share prices tend to hit bottom “at extremely cheap levels” relative to earnings during so-called secular bear markets, Reid wrote five days ago in his first equity strategy report. Secular bears consist of multiple rallies and declines, with each slump producing lower valuations than the prior one.

    The CHART OF THE DAY shows the Standard & Poor’s 500 Index’s price-earnings ratio since 1900, based on data compiled by Yale University’s Robert Shiller and cited in Reid’s report.

    Shiller calculated the P/E ratio at 6.6 in September 1982, just before the 1980s bull market started. The gauge sank to less than six in the depths of the Great Depression and at the beginning of the 1920s. This year, it has stayed above 13.

    “History tells us that at some point in the next decade there will be much more stressed valuations than today and a once-in-a-generation buying opportunity,” wrote Reid, who previously focused on credit-market strategy.

    Even “a large rally” later this year and into 2010 may not be enough to prevent this scenario from unfolding, he added. The S&P 500 has climbed as much as 40 percent from its March 9 lows. Reid’s European benchmark, a local-currency version of the MSCI Europe Index, has risen as much as 33 percent.

    (To save a copy of the chart, click here.)

    To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net
    Last Updated: June 22, 2009 11:22 EDT
  2. Attention to detail......
  3. S2007S


    We are going to hear this alot more now that the market is headed to new lows rather than dow 10000 or s$p 1000.

    Everyone bull might be throwing in the towel which to me makes no sense because these bulls have rallied this market time and time again since March. Not only that many have actually come to the conclusion that this is a new bull market in the making. I can almost be 99% sure we are going to new lows and that this last 35% rally was just a simple bear market rally and nothing more.
  4. Who cares about Robert Shiller . . . does he TRADE for a living? Is he a TRADER?

    I don't believe so.
  5. Please post a screen-shot of your short positions destined to make money on your new low prediction.

    My guess is that you don't have any short positions to post, because you are a typical ET
    "paper-trader" . . . :p

  6. Thanks.

    It didn't show up in the article for me.

  7. S2007S


    You can think what you want, I told you time and time again I DO NOT trade for a living.

    Aside from that you can hold all the long positions you want as the the markets continue to head to new lows, because stocks are in a new bull market..... :p
  8. Then why do you continue to post here in the TRADING FORUM???

  9. I envy you! Being able to predict the future like that with such accuracy! So I assume the fortune you are about to make will be substantial enough for you to retire?
  10. It's in a tab at the top of the article, kind of inconspicuous.
    #10     Jun 22, 2009