Down goes the Dow

Ghost of Igloi wrote:

Be a big swinging dick

What is your infatuation with the penis? First it’s circumcision talk, now this.

No, you have that wrong. That is the poster Trews. He also has an obsession with the poster GOI. Check this weird dialog out:

http://www.letsrun.com/forum/flat_read.php?board=1&id=6374253&thread=6370858#6374253

It’s not Trews. GOI has a registered name. The guy's a perv.

Master Bates wrote:

It’s not Trews. GOI has a registered name. The guy's a perv.

Sure Trews.

aaand another round of all time highs in the US. Small, mid, large.

Highest CAPE 10 since the Technology Bubble (August 2001). Now approaching the 1929 Stock Market Crash High (August 1929).

http://www.multpl.com/shiller-pe/

agip wrote:

aaand another round of all time highs in the US. Small, mid, large.

You knew there would be commentary to follow as to why this is nothing to celebrate.

mellon wrote:

agip wrote:

aaand another round of all time highs in the US. Small, mid, large.

You knew there would be commentary to follow as to why this is nothing to celebrate.

Enjoy your blissful delusion.

The rising market is not a delusion, though it is blissful (at least for those invested).

Face the fax wrote:

The rising market is not a delusion, though it is blissful (at least for those invested).

Delusional in a sense that most here believe that it will continue, therefore will stay overweight equities and ride them down. What has that achieved? And if you don't think that can't happen, well it already has twice over the last twenty years.

You have no idea what people here believe or what their plans are.

As for the market going down, we all know it will. And we know it will come back stronger, if history is any guide.

Ghost of Igloi wrote:

I comment on the market. I don't give advice over the internet.

Previously....

Ghost of Igloi wrote:

I like Heinz Ketchup and Kraft Velvetta cheese, but the stock trading at 51 times last years earnings no. Wells seems OK, best in class in mortgage business.

Igy

Ghost of Igloi wrote:

Highest CAPE 10 since the Technology Bubble (August 2001). Now approaching the 1929 Stock Market Crash High (August 1929).

http://www.multpl.com/shiller-pe/

note that the 25 year average for the CAPE is 26.3.

So we're not that far over the quarter century average.

But yeah...expensive market.

DGTD Historian wrote:

Ghost of Igloi wrote:

I comment on the market. I don't give advice over the internet.

Previously....

Ghost of Igloi wrote:

I like Heinz Ketchup and Kraft Velvetta cheese, but the stock trading at 51 times last years earnings no. Wells seems OK, best in class in mortgage business.

Igy

agip wrote:

Ghost of Igloi wrote:

Highest CAPE 10 since the Technology Bubble (August 2001). Now approaching the 1929 Stock Market Crash High (August 1929).

http://www.multpl.com/shiller-pe/

note that the 25 year average for the CAPE is 26.3.

So we're not that far over the quarter century average.

But yeah...expensive market.

If you are going to use the average PE you should also understand the distortions of the Technology Bubble that led to those high PEs. Furthermore, the same high PEs led to a NASDAQ Composite that dropped 82% and did not get back to even until May 2015, and even today has a 17 1/2 year compounded return under 2%. Also, during that earlier bubble dividend paying stocks were cheap and investors ignored them like the plague. Not today, so called safe havens like McDonald's have attracted funds as bond proxies, and that is why the median stock valuation has never been higher.

McDonald's is up 29% on the year, while the corporate debt has doubled from $12.5 Billion to $25.95 Billion in six years. During that same period revenues have declined from $27 Billion to $24.6 Billion, and shares outstanding have declined from 1.021 billion to 819 million. So, the road to “profitability” in terms of earnings per share (EPS) is driven by borrowing money to buy back their own stock at ever higher prices. Even with that nonsense the stock still trades at the rich price to earnings ratio (PE) of 26, when the average historical market PE is about 16 (the lower the more attractively valued). That is, investors are paying 62.5% higher for unit of earnings than normal, and it is far worse, because the EPS is juiced by the lower share count. EPS is calculated by dividing the earnings by the shares publicly traded. Of course one can see the disaster if all the debt has to be refinanced at higher rates. Bottom line there is no company growth, financial engineering is driving performance and investors are behaving foolishly. You can see similar monkey business in other somewhat staid businesses such as Proctor and Gamble, Johnson and Johnson, Hewlett Packard and Microsoft to name a few.

Today’s investment climate is far from normal. In the meantime investors remain in a state of "blissful delusion" (credit to John Hussman).

Igy

Face the fax wrote:

You have no idea what people here believe or what their plans are.

As for the market going down, we all know it will. And we know it will come back stronger, if history is any guide.

Best wishes.

Facts Checker wrote:

DGTD Historian wrote:

Previously....

A market comment. All of which hold true today.

Giving your opinion on exactly 3 stocks is not “a market comment.”

Call it whatever you want. I just write what I see, if you don't like it tough.

People are investing in tickers anyway. Like IWC, the I-Shares Russell micro-cap index, without looking it up I bet few could name a stock in the index. Yet the index has been straight up since mid-August. I am sure the hope is tax cuts some how translates to better earnings, which have been declining for some time now.

I call it giving advice.