Posted on 01/22/2013 6:09:40 AM PST by blam
One Sentence That Explains Why Bears Are Dropping Like Flies
Joe Weisenthal
January 22,2013
Flickr / Brian Digital
To really appreciate this moment, you really need to appreciate the explosion of optimism that's broken out in global financial markets.
It's not just that the S&P is near all-time highs. It's not just that pro-investors are more in stocks than they've been in years.
It's also that economic skeptics are starting o throw in the towel, and accept that the economy is back.
Either that's a great sign, or it's a sign that things have gotten way to extreme on the positivity front.
Anyway, SocGen's Kit Juckes sums up the bearish plight in one sentence:
The reality is that we are short of things to worry about and long of liquidity which tends to weaken the resolve of any bear.
Sounds right.
Oh, and the title of Juckes' note? "Looking for something to worry about."
Be afraid!
(Excerpt) Read more at businessinsider.com ...
Small error there. A stock's P/E is a measure of how cheap or expensive a stock is, not it's dividend yield.
As of yesterday, Procter and Gamble (symbol PG) had a P/E of 19.4 and a dividend yield of 3.22%.
www.bigcharts.com
Buy stocks in companies that make real products, are well run and stable.
Agreed. Many believe that such companies are good inflation hedges as long as inflation stays under 7% or so.
You are right about the difference between dividends and yeild, but retained earnings can be reinvested. Digital Equipment Corporation “reinvested” all profits for about thirty years (and they were *very* profitable). The problem was, by the time they decided to start paying dividends, they were no longer profitable and are no longer around, although there are some greying HP employees in Maynard who will help you mantain your VAX.
Yea... Took ME a bit too long to reach that conclusion... (about 6 months ago).
For the longest time, I was torn between the basic question:
Inflation or Deflation??
The investment direction is entirely different for these two scenarios. But, $6 Trillion in stimulus... plus capitulation from Japan, and yes.. EVEN Switzerland's Central Banks.. has put an END to the question in my mind.
The Balloon is heated, and risen. The mooring ropes are being tossed aside, one by one...
Once upon a time, I taught myself how to set up and manage a small VAX network. After about 2 years of that, I got a chance to go to a VAX Management class in Denver.
That was one the BEST classes I ever took. Every day, I was saying... "OH, THAT's WHY I have to do that!"
or..
"Oh no.. That's NOT how that works! "
:-)
This is not your father's market.
That we have any economy at all is primarily due to Republican governors and legislatures cleaning up their individual states and making them open for business to hire and make profit.
Excellent comment.
VMS was sweet, but Ken Olsen could never give up priority operating systems. I remember at a block party around 1990 I had a neighbor who was in charge of “VMS Products” for DEC. He had 14 employees and was making about $250 million a year mailing out nine-track tapes with FORTRAN compilers on them. It’s hard to give up that kind of margin. People thought DEC had a lisence to print money, and for about a decade and a half, they did.
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