Wow, he’s never been wrong. (But then why does he have to hawk newsletters?)
Figures I can’t find my link to the old DJIA priced in gold ounces. It makes a pretty dramatic statement, demonstrating that the industrial average has been in a constant slump since the dot com boom era.
That is particularly bad considering the hyperinflation we will likely start to see in the not-too-distant future due to the inevitable increase in the money supply that will be needed to finance our debt. (In other words, if he’s right, we’re looking at penny stocks)
Yeah...by that time the DOW will be down to 5 companies.
I got laughed at. I'm glad to see someone agrees with me.
Henry Blodget
Jun. 17, 2010, 7:04 AM
We've been pointing out for a while that, based on a cyclically adjusted PE ratio, the stock market is significantly overvalued--say, 20% or so.
To arrive at this view, we use a "fair value" estimate for the S&P 500 of about 900, which is close to the one used by fund manager Jeremy Grantham, fund manager John Hussman, and others. This compares to the S&P's current level of about 1100.
But now Andrew Smithers, an excellent economist based in London, is telling us that we're way too optimistic, that fair value for the S&P 500 is actually in the 700-750 range. Smithers, therefore, thinks the stock market is about 50% overvalued.
Smithers constructs his estimate in two ways: 1) the same cyclically adjusted PE ratio that we use, and 2) something called "Tobin's Q," which is a measure of replacement value. Like Yale professor Robert Shiller, Smithers charts these valuation measures for the last century, which provides some context for where we are today:
[snip]
The DJIA is down 16 as I post.
Presumably under a Global Communist regime the Dow would be at zero?
Robert Prechter has successfully predicted 20 of the last 3 declines in the market. Unfortunately, he may be correct this time, as the markets continue to discount the onset of socialism in America.
This is the change that Obama promised.