One Sentence That Explains Why Bears Are Dropping Like Flies

TBI ^ | 1-22-2013 | Joe Weisenthal

[Leaning Right]

Proctor and Gamble had a P/E of about 10, with no specific adverse information. Where can you get 10% these days?

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.

[Lonesome in Massachussets]

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.

[SomeCallMeTim]

There are worse places to park your dough than in dividend-paying equities of solvent corporations that *have* real assets and make stuff that people actually want (or better yet, need).

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...

[SomeCallMeTim]

HP employees in Maynard who will help you mantain your VAX.

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! "

:-)

[Wingy]

This is a silly thread. Okay, you're a fund manager and you are charged with making your clients some money. Do you go to the bond market and make .25% or do you do what every other fund manager does and take your chances in the equities market. You watch the thing like a hawk, which increases volatility, and make money for your clients. Hard on the fingernails, and paints a truly false picture of the state of the economy.

This is not your father's market.

[Free Vulcan]

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.

[MeneMeneTekelUpharsin]

One of the characteristics of people who surrender their individual authority to become dependent upon the authority of another is that they lose their individual ability to discern truth from non-truth.

Excellent comment.

[Lonesome in Massachussets]

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.