Down goes the Dow

Curtis MS wrote:

Ghost of Igloi wrote:

Market price is the index value.

Igy

No, it's not. The S&P index is the quotient of its market cap and a proprietary number.

The figures I used were sourced and calculated as stated. If you have a different method with a different conclusion let's see the calculation.

You can't because you are wrong.

Igy

Curtis MS wrote:

Ghost of Igloi wrote:

The figures I used were sourced and calculated as stated. If you have a different method with a different conclusion let's see the calculation.

You can't because you are wrong.

Igy

I was simply pointing out that your statement was incorrect. Market price and the index value are two different things.

If you're equating index value with market price, then your calculations must also be wrong. This should be obvious to anyone with any knowledge of market basics.

Numbers and calculation or go home.

You can't because you are wrong.

Everything I quoted is standard calculation as sourced and referenced.

Poor attempt at trolling.

Igy

Not needed. Your fantasy doesn't exist. If it does provide the calculation, source and reference.

Since it doesn't exist as you have stated, you go home, to bed, and without dinner troll.

Igy

You write nothing but pure nonsense.

Price = 2,270

Earnings = $87.08

PE = 26

2,270 / 87.08 = 26

I provided the data, sourced it, calculated it.

You don't know what you are talking about.

Go immediately to bed without dinner.

Igy

You are either an idiot or a troll. I assume the later. So, troll, provide the numbers, source and reference or you got nothing.And you have nothing.No dinner, to bed troll.

Check ur math wrote:

2270 is not the price. It's the index. You are confusing the two.

I think I'm the one being trolled here.

Mom died last year at age 95 jerk. My bother and I were her caregivers.

Some day you will grow up.

Hopefully someone will care about you and do the same, but based on my interactions with you, well the answer is probably NO.

Ghost of Igloi wrote:

Market price is the index value.

Igy

Please tell me you were kidding.

Poor Igy. He really struggles with basic math. Not a good attribute given his chosen profession.

OK. Wise one, show me where my math is wrong?

Waiting wise one?

You can't do it!

You failed at your chosen profession...

.....a troll failure!

lol Igy somebody here who ran the numbers used exactly the same ones as you did.

So let's talk reasonability.

P/E uses EPS as divisor, and as we know EPS have risen in the short term due to financed repurchases. It's a trade of short-term high-level gain for spread-out longer-term lower-level pain, so at this point those effects are probably baked-in. Yes buybacks figured into that 2014Q3 number.

Let's use your 29% higher than current record, and 54% higher than last quarter, and use the time-frames of 1 and 2 years.

One reasonable question to ask would be whether there has been any historical precedent for such rises. When looking at the historical record, I think it's important to keep separate "normal activity" from "extraordinary events" like 2000 and 2008, at least for purposes of going 29% higher than the current record.

For 54% higher than last quarter, anything goes as far as the historical record is concerned, because there are many who argue that we are in a type of corporate recession at the moment, that could experience a reversal due to policy.

Regarding the 29%, it appears that similar such gains have in the past been achieved over a 2-year period of "normal" activity--you can look more closely, somebody here will be, also. 1986-1988; 1993-1995; 2003-2005; 2004-2006. Also, you can argue whether or not those periods were "normal", or at least equivalent to likely conditions going forward.

Regarding the 54%, we have 2001-2003, and of course 2008-2010, both extraordinary times...however, what is interesting is whether those rises were the result of business response to public policy. We had all sorts of policies, from bailouts, to banking, to TARP, to QE, and many believe that they affected prices, but what about earnings? It is possible that rising consumer confidence combined with "business tightening" in the form of layoffs and vastly reduced CAPEX contributed to earnings growth.

What say you? Is it still unreasonable, given the current state of affairs, and the likely policy interventions that will occur such as repatriation and lower corporate tax rates? Not to mention reduced regulation. You have to believe 2 things: 1) that there will be policy interventions, and 2) that business will respond. Countering that are global economic conditions, control over the Fed, and sovereign crises in important markets.

I haven't come down on any side yet, still thinking.

Also, I'm increasingly getting the feeling that TPTB see "the government" as an entity separate from the people as far as debt servicing is concerned.

I have heard some say that the debt servicing levels of the fed gov't are reasonable when compared to the debt servicing levels of US households...actually, even cheap! Meaning that we could pile on vastly more debt, as Congress seems poised to do.

What they seem to be missing is that gov't is not a separate entity, but that the gov't debt servicing is paid by households.

I swear, ONLY those in gov't could not understand this. It's really amazing.

In any case, get ready for a HUGE PILE OF NEW DEBT to be taken on by the federal gov't. They really believe that we can "afford it".

“Regarding the 29%, it appears that similar such gains have in the past been achieved over a 2-year period of "normal" activity--you can look more closely, somebody here will be, also. 1986-1988; 1993-1995; 2003-2005; 2004-2006. Also, you can argue whether or not those periods were "normal", or at least equivalent to likely conditions going forward.”

Igy Response: 12/31/1988 LTM PE = 11.69; 12/31/1995 LTM PE = 18.14; 12/31/2005 LTM PE = 17.85; 12/31/2006 LTM PE = 17.40. Starting and finishing from a more reasonable PE base. The period demographically (less old people like me) favored higher economic growth. More contributors than takers, we have the opposite now. The rise of PC and internet increased corporate productivity. Today we are reaching the upper limits of what can be added to that equation.

“Regarding the 54%, we have 2001-2003, and of course 2008-2010, both extraordinary times...however, what is interesting is whether those rises were the result of business response to public policy. We had all sorts of policies, from bailouts, to banking, to TARP, to QE, and many believe that they affected prices, but what about earnings? It is possible that rising consumer confidence combined with "business tightening" in the form of layoffs and vastly reduced CAPEX contributed to earnings growth.”

Igy Response: Represented a bounce off a serious recessionary bottom. The recovery and subsequent speculation in the “housing bubble” and current “all asset bubble” was fueled by central bank policy. That same central bank policy has created a more dangerous boom-bust cycle. In the most recent bust, the poor decisions by individual, business and government entities in the bust were moved on to the Federal Reserve balance sheet (now $4.4 Trillion).

“What say you? Is it still unreasonable, given the current state of affairs, and the likely policy interventions that will occur such as repatriation and lower corporate tax rates? Not to mention reduced regulation. You have to believe 2 things: 1) that there will be policy interventions, and 2) that business will respond. Countering that are global economic conditions, control over the Fed, and sovereign crises in important markets.”

Igy Response: Yes, I believe it is unreasonable for many reasons. We are currently entering the second longest expansion ever. Equity and bond valuations have already factored in most of the “hopium” scenario. On the other hand, government, corporate and individual debt has never been higher. Debt not growth has fueled this cycle. The large amount of debt is in fact an inhibitor to growth, so any policies based on additional debt adds to the problem. It is a demand problem, although repatriation of corporate profits made overseas or lower corporate tax rates sound like an elixir to our economic ills, there is little to support its validity. The best analogy I can make is at this stage of the business cycle we are running uphill and into a wind.

Read more:

https://www.letsrun.com/forum/flat_read.php?thread=5369837&page=843#ixzz4Vee0LyTV

Face the fax wrote:

You've been shown repeatedly. Get your head out of your ass.

Classic.

Make an assertion of fact.

Get called upon to prove it.

Cannot do so as it was a lie thus claim it has been proven before -- may times --again with zero documentation.

A guy this stupid should not try to antagonize his betters.

I am not a CPA and never claimed to be. I am a Certified Financial Planner (CFP). Furthermore, in the text I used, and reference quoted, the market price was and is the index level. You can look for the yourself in the references provided.

But you don't want that answer.

I doesn't fit your narrative.

Your problem, not mine.

Igy

Sure.

Original post above. The PE figures in paragraph one were extracted from Howard Silverblatt's S&P Dow Jones, S&P 500 Earnings and Estimate Report. Spread sheet format, Google "Howard Silverblatt S&P 500 Earnings and Estimate Report." All PE's derived from month end S&P 500 close divided by Last Twelve Month S&P 500 Earnings.

Lemons wrote:

I just read your references and found nothing stating that market price is the index level. Perhaps you can provide a direct quote? But my guess is you won't/can't.

Link to current S&P 500 PE:

At 1:05 PM Eastern time the S&P 500 was at 2275.87 LTM EPS was $87.17 which equates to a PE of 26.11.

You are wrong.

Go home without lunch, head to theement.

Igy