Posted on 03/15/2015 7:00:49 AM PDT by expat_panama
Not sure where that idea came from but let's put it to rest and have both of us agreeing that fundamentals matter and they mean things. We talked a lot about EPS's, so lets actually look at them:
Sure they're at an all time high, just like they were in '88, '89, '93, '94, '95, '97 --the point being that as a metric it's not by itself clearly bearish. This site has 'em going back to 1870 and 'all time high' levels is the norm. Let's go the whole enchelada w/ earnings and dividends on top of share prices:
You tell me: why should we see current levels as bearish?
...This is a fed-driven market...
That line works great for pundits and politicians, but working for a living demands hard facts and numbers. The fed does not buy common stock so they can't move share prices. Loony leftists like to say the government's all powerful but in real life the Fed's small potatoes. Right now Fed banks got about $4T --mostly T-bills plus a few mortgages. Total corporate assets (from page 124 of the Flow of Funds) for non-financial businesses is $37T. The Fed --or any governmental agency for that matter-- couldn't control the free market even if it wanted to. Central planning is a lie.
ahhh, making me remember the old French square for fresh donuts, a carriage ride, and then a great sandwich at a sidewalk cafe listing to jazz from street musicians...
We’re not even on the same page. Good luck in your investing endeavors.
you bet, cheers!
I’ve said it before and I’ll say it again.
What “The sky is falling!” contingent misses is that when you invest in stocks, you are investing in American business.
American business WILL figure out a way to win. They always have, they always will. Their CEOs want it, the politicians want it - both the liberals and the conservatives.
Individual companies come and go, but, as a whole, American business succeeds.
With my asset allocation, if stock gains push my stock investments too high, I capture some of that gain and move it into bonds. In fact, I’m buying some Vanguard Inflation Protected Securities (VAIPX) and Vanguard Intermediate Term Tax Exempt (VWIUX) funds tomorrow.
--even when the American government fails. American business is the American people, a group that is truly great.. Thanks for restating this, it's one of those things that really needs to be repeated.
Whoa-- let's hit the new week running with strong futures -- metals up +0.11% and stock indexes +0.46%! Also our Monday morning's getting reports early with:
Empire Manufacturing
Industrial Production
Capacity Utilization
NAHB Housing Market Index
Net Long-Term TIC Flows
--and somehow we'll want to keep up with treads active since the weekend:
Reverse split your stock 2 for 1 ... EPS doubles.
Finance professor pointed this out to me decades ago to show that EPS alone means nothing.
American business WILL figure out a way to win Their CEOs want it, the politicians want it - both the liberals and the conservatives.
*****************
American business is adaptive, yes, but the U.S. has the highest corporate tax rate in the OECD. How are the politicians helping in that regard? And how do liberal politicians desire to expand the state and regulate everything that moves help?
Reverse split your stock 2 for 1 ... EPS doubles.
Let's take that to mean you know of no CEO that gets extra for masking falling earnings with buybacks. We can also just agree that the same applies with stock splits.
So a happy St. Patrick's day although futures traders aren't pointing to any new pots of gold, They got metals down -0.72% and stock indexes off -0.28%. After all, yesterday's bouce was low volume (dead cat style?). Seems the up-tick was another bad-news = good-news with the dismal production and housing numbers. Today's reports are 'lite' with just Housing Starts and Building Permits.
In other news:
In Praise Of Stock Market Short Sellers - James Surowiecki, The New Yorker
Wall Street's Bonuses Should Be a Great Deal Larger - John Tamny, RCM
The DJIA We Know and Love, But Don't Use - Allan Sloan, Washington Post
Low Rates Are Here For a While: How to Play Them - Martin Pelletier, NP
Millions of Workers Seem Anchored To Sideline - Gene Epstein, Barron's
More Phony Obamacare Claims From White House - Editorial, Investor's
Alan Sloan is full of sh!t.
http://en.wikipedia.org/wiki/Charles_Dow
http://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average
Initial components
Dow calculated his first average purely of industrial stocks on May 26, 1896, creating what is now known as the Dow Jones Industrial Average. Of the original 12 industrials, only General Electric currently remains part of that index.[11] The other 11 were:[12]
American Cotton Oil Company, a predecessor company to Bestfoods, now part of Unilever.
American Sugar Company, became Domino Sugar in 1900, now Domino Foods, Inc.
American Tobacco Company, broken up in a 1911 antitrust action.
Chicago Gas Company, bought by Peoples Gas Light in 1897, now an operating subsidiary of Integrys Energy Group.
Distilling & Cattle Feeding Company, now Millennium Chemicals, formerly a division of LyondellBasell, the latter of which recently emerged from Chapter 11 bankruptcy.[13]
Laclede Gas Company, still in operation as the Laclede Group, Inc., removed from the Dow Jones Industrial Average in 1899.
National Lead Company, now NL Industries, removed from the Dow Jones Industrial Average in 1916.
North American Company, an electric utility holding company, broken up by the U.S. Securities and Exchange Commission (SEC) in 1946.
Tennessee Coal, Iron and Railroad Company in Birmingham, Alabama, bought by U.S. Steel in 1907; U.S. Steel was removed from the Dow Jones Industrial Average in 1991.
U.S. Leather Company, dissolved in 1952.
United States Rubber Company, changed its name to Uniroyal in 1961, merged with private B.F. Goodrich in 1986, bought by Michelin in 1990.
Starts - Huge miss (weather)
Permits - In line
stock futures coming back up, b.n.=g.n.? Maybe like yesterday’s horrible production & utilization stats.
#Weather :-)
Surely that explains everything...
” b.n.=g.n”
They should teach that formula in economics classes now. Seems like it has become entrenched.
and that’s why it all goes back to ‘climate change’.
sure seems that way. I’m thinking how the idea gets more and more popular the more the econ cycle ages. Traders know that rate hikes at the end of the cycle are inevitable and they just want the bull market to last forever. Problem this time is that our ‘econ growth’ hasn’t even gotten as strong as it was a decade ago, much less what we’d usually consider as “growth”...
Someone needs to do a chart where:
BN = GN
GN = GN
BN = BN
GN = BN
Like a Gartner Magic Quadrant graph or something with the market reaction :-)
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