There are still plenty of companies out there trading below their historical PE. The important thing to mention is that money has come out of the market. I can't see us getting very high without a bounce in the American male. Yeah you heard me. Men need jobs and they need to get paid. There will not be enough money entering the market to print new highs until confidence is restored. The Fed can only print so much money until their plan backfires (if it doesn't backfire as it is). There is a temporary ceiling, the dollar can't go to 0. This upward move will end, in one way or another. Then, stocks clearly have a floor. The 'end of the world' panic is gone, and stocks will not return to severely undervalued levels. I say we enter a new trading range, though higher than the last. Short term, we will continue to grind higher. There will be a chase for performance and dumb money will also begin entering. I would call for a January correction... I mean, who is the baller that is going to step up and sell right here, right now? We have to wait until buying has exhausted. Shorts are still being squeezed. If this rally in financials continues, we will obviously continue higher. The real question is, how will these inflated commodity prices effect the consumer? Many consumers have not participated in this rally, after being scared away in 08. Their wealth is not increasing, in fact they are losing money since they are holding cash. Higher costs of living.... By December we will be priced for perfection, if we aren't already. All data will be sold. That is my prediction LOL
No, I provided evidence and data to refute his blind assertions about employment, et al. improving. He was refuted and had no retort. 1982 is about the worst comparison to the current period imaginable. Stock valuations were at their lowest levels in decades--much lower than March 2009. And we were actually fighting inflation and raising interest rates. Once again, I was talking about the economy, not the stock market. Do you still not get it? Economically, there's no past period that's comparable to what we're in now: prolonged zero interest rates with QE thrown on as a desperate last measure. As one analyst put it, "We are embarking on a course through uncharted waters. No one (including the Fed) has any idea what the unintended consequences will be." If you want to argue that stocks can continually go up (not just another few weeks or months) in such an environment, you need to wrestle with this, not 1982, 1994 or any other baseless comparison: http://hussmanfunds.com/wmc/wmc101108.htm And read this while you're at it, learn about inflation here (a book that was going for $800 range in hard copy). http://www.hartgeld-forum.de/forum/files/dyingofmoney.pdf
A little more on employment: A Few Thoughts on the Employment Numbers By Dr. Lacy Hunt, Hoisington Investment Mgt. Co. The October employment situation was dramatically weaker than the headline 159k increase in the payroll employment measure. The broader household employment fell 330k. The only reason that the unemployment rate held steady is that 254k dropped out of the labor force. The civilian labor force participation rate fell to a new low of 64.5%, indicating that people do not believe that jobs are available, but this serves to hold the unemployment rate down. In addition, the employment-to-population ratio fell to 58.3%, the lowest level in nearly 30 years. While not actually knowing what happened to the net job change in the non-surveyed small business sector, the Labor Department assumed that 61k jobs were created in that sector. This assumption is not supported by such important private surveys as those from the National Federation of Independent Business or by ADP. Just a month ago the Labor Department had to revise downward the job totals due to a serious overcount of their statistical artifact known as the Birth/Death Model. The most distressing aspect of this report is that the US economy lost another 124K full-time jobs, thus bringing the five-month loss to 1.1 million in this most critical of all employment categories. In an even more significant sign, the level of full-time employment in October was at the same level that was reached originally in December 1999, almost 11 years ago. An economy cannot generate income growth by continuing to substitute part-time work for full-time employment. This loss of full-time jobs goes a long way to explain why real personal income less transfer payments has been unchanged since May. (Emphasis in bold mine)
vix at historical low, market very positive sentiment, election/qe2 hardly any market(equity) reaction. This is either the beginning of a bullish run, or the calm before a major reversal. One thing is for sure, this market will not remain sideways, it will gravitate towards 1 extreme or the other. As to which side, noone knows. All those pages of bullshit economic discussion is just that...bullshit. Just be ready when the moves happen. Upward move will be more gradual and easier to manage, downside will crack a few heads...
You don't get it. Period. The markets are fairly valued yet you still get hysterical every day about this. The ytd increase is around 10%. Not even a strong year but you are still hysterical.