Down goes the Dow

agip,

That's good for long term (ten year time horizon to need the money) buy and hold investors that can stick to their discipline.

As you know my view is that in the end it is all about valuation. The last time GAAP earnings were LTM $86.50 the S&P 500 was trading at 1440 and had a PE of 16.66, the date was September 30, 2012. The 12/31/2015 earnings were $86.47 and the year closed at 2043 with a PE of 23.64.

So by my math the risk to the downside is rather high. I think most investors are being rather foolish in face of data that is deteriorating. Anyone who thinks S&P 1500 or Dow 13,000 is a remote possibility is kidding themselves, because based on current earnings that would be a reasonable index valuation level.

Igy

Ghost of Igloi wrote:

Slip,

And I notice you don't have enough integrity to register your handle.

Igy

It ain't me "Sally" (aka defector and try to keep up guy) who is constantly using other peoples names.

My God you're stupid. Go ahead and serve your Zi*nist masters. You Wall Street types are all the same.

Another high close for the year.

Igy, seriously.

there is no good reason to engage the troll.

just let him write what he wants. You don't have to respond to it.

In fact, you *shouldn't* respond to it.

Do us a favor and ignore it so he goes away.

Has anyone else noticed that Igy and Slip (aka K5) tend to show up at the same times? And that both have that "holier than thou" attitude and never admit when they're wring?

There's your troll, folks. Ignore him.

#dontfeedthetroll

#ignoreigy

#igyisk5

a refutation of the "buybacks have fueled the rally" argument.

I have no idea how to evaluate the validity of its argument.

http://finance.yahoo.com/news/torsten-slok-david-bianco-stock-buybacks-share-repurchase-myth-120836246.html

Ever since the financial crisis, corporations have been buying back trillions of dollars worth of their stock.

In doing so, a popular narrative developed: the bull market is the product of financial engineering. And there’s some merit to this argument. When you companies reduce share count — all things being equal — shareholder value is created because the same profits are distributed among fewer shares. Furthermore, by buying stock in such mass quantities, companies directly put upward pressure on stock prices.

However, Deutsche Bank’s Torsten Slok and David Bianco believe it’s a mistake to attribute the bulk of the market's gains to buybacks.

“Since March 2009 the market capitalization of the S&P500 (^GSPC) is up around $10 trillion and the total amount of buybacks over the same period is around $2 trillion,” Slok said on Monday. “In other words, the vast majority of the increase in the S&P500 has nothing to do with buybacks.”

agip,

S&P continues to say that stock buybacks are adding a 4% tailwind to earnings. Therefore using that standard current earnings are actually worse by $3.46 on earnings of $86.47.

Igy

econ news today:

PPI: continued softness in prices. Core y/y prices +1.2%

Retail: Same store sales +0.6% and sales less autos and gas +0.3%

soft as toilet paper, there.

Empire Mfg: +0.62. Which is basically flatlining. Nothing happy there either.

business inventories flat

finally, something strong: housing. Housing market index

#ignoreigy

#igyisk5

#stopantisemitism

#boycottdopes

#sallyneedsapsyche

#buymorechk

agip,

A different view of stock buybacks today from Business Insider:

http://www.businessinsider.com/buybacks-disappearing-could-mean-recession-2016-3

Igy

Ghost of Igloi wrote:

agip,

At the time of their last filing the Sequoia fund had a 19% position in Valaent Pharma. Ouch if they are still that heavy. The growth funds with heavy weighted positions are time bombs.

Igy

yeouch that's got to hurt. That's why I don't like active managers - one mistake, and they are pooft. Unless you are willing to wait ten years to see if they come back from it.

A major argument for indexing is that time lag...yes value does better than growth over the very long run. But waiting ten years for that to happen, like now? It can be a serious lifestyle damagerif you have to retire now after living ten years with an underperforming value portfolio.

agip,

Managers over weight high growth stocks has been in vogue as a way to beat the index. In this case you can see the obvious negatives when you are wrong. I tend to avoid managers with large over weights in a handful of stocks.

Igy

#dontfeedthetroll

#beaman

#stopthedishonesty

You are just plain weird.

Just back from Vancouver, where I visit periodically and lived for a while. Anybody want to know anything? Yes, it rained for a week straight. The only sun was at the top of Blackcomb mountain for a few minutes on Saturday.

agip, what is the point of picking the one good-looking indicator out of a forest of bad ones? Are you now chasing the housing sector?

DJIA now just below 17.2k, and has stuck near my 2016 pre-election upper bound of 17k for a while now, just as it stuck near my lower bound of 16k. This bubbling slightly above 17k doesn't bother me. Almost 1/3 into the year, indexes show no surprises.