Down goes the Dow

Ghost of Igloi wrote:

OK, a better fudged number would be 2,370 / 112 = 21.

Ghost of Igloi wrote:

https://view.officeapps.live.com/op/view.aspx?src=https%3A%2F%2Fus.spindices.com%2Fdocuments%2Fadditional-material%2Fsp-500-eps-est.xlsx

Cell 114-F

Do you really think that everyone here lacks mathematical chops like you do? The numbers you use in your calculation have absolutely no semblance to the numbers you cite in that link. You're not fooling anyone.

Ya, mutually I'm sure.

Investment Advisor wrote:

Ghost of Igloi wrote:

OK, a better fudged number would be 2,370 / 112 = 21.

Ghost of Igloi wrote:

https://view.officeapps.live.com/op/view.aspx?src=https%3A%2F%2Fus.spindices.com%2Fdocuments%2Fadditional-material%2Fsp-500-eps-est.xlsx

Cell 114-F

Do you really think that everyone here lacks mathematical chops like you do? The numbers you use in your calculation have absolutely no semblance to the numbers you cite in that link. You're not fooling anyone.

I beg your pardon Mr. Investment Advisor, but you are in the wrong profession.

Apparently so is Igy.

Over the last year long term bonds have been the place to be despite a rise in rates. Because the higher coupon has bailed out investors.

Short: +0.73%

Inter: +0.59%

Long: +1.34%

I read a study on this - even in times of rising rates bond funds tend to make money, because of the coupon and constant buying bonds that pay more interest.

but a sharp rise in rates would hurt the longer term bonds sure.

But I do think it is fascinating how the conventional wisdom has been to own short term bonds and that has been wrong, on a peformance basis anyway. Prob not on a risk-adjusted performance basis.

Not keeping up with inflation.

Gruntz wrote:

Not keeping up with inflation.

truth.

But my point is this:

the 10 year yield went from around 1.95% a year ago to 2.58% now.

I think most people would expect a 50% rise in the rate of the 10 year to spell big losses for interm and long term bonds. That's the conventional wisdom.

But that didn't happen - in fact both made money. And they made more money than short term bonds, which is where people tend to hide out during fed rate hikes.

So what now, going forward? Do we hide out in short term bonds, expecting more rate rises? Or do we be brave and buy inter and long term bonds, betting that the pattern of the last year will continue?

agip,

BLV lost -13.65 in NAV from July 2016 until today. In July 2016 the 10 Year Treasury was 1.35% rising to 2.6%, or 1.25%. Negative NAV pricing may accelerate if the market prices a steeper rise in rates. I can see how that may not happen, especially if the stock market struggles.

Igy

Ghost of Igloi wrote:

agip,

BLV lost -13.65 in NAV from July 2016 until today. In July 2016 the 10 Year Treasury was 1.35% rising to 2.6%, or 1.25%. Negative NAV pricing may accelerate if the market prices a steeper rise in rates. I can see how that may not happen, especially if the stock market struggles.

Igy

the coupon! the coupon!

Ghost of Igloi wrote:

There is no average price number you numbskull.

I'm pretty sure that was his point. You can't calculate a PE without a price value as you were trying to do.

Huh? You are as out of it as he is.

The P in PE stands for "price". You cannot calculate the PE without the price. It's really quite simple.

OK wise one, I will spell it out for you in plainly.

Take careful notes.

Price = Current S&P 500 Index level

Earnings = projected Q4 2016 non-GAAP EPS x 4

PE = Price / EPS

21 = 2370 / 112

Of course if I really wanted to burst YOUR BUBLE, I would use GAAP. Which would be:

24 = 2370 / 96

Are you seriously suggesting that the price is $2370?! That's crazy.

Yes, and go to your room without lunch, write 100 times "Hiram is a moron."

Pleazse wrote:

Because you can't. Thus the insults.

You can always tell The Detector Guy no matter what name he posts under because, while he may not know anything and is not in the least an independent or creative thinker or writer, he is world class in being obnoxious. A clear identifier/

Oh, the irony!

What is the Detector Dude's story? Certainly seems detached from reality. Maybe really does live in mommy's basement. A diet of Top Ramen and Dominos week day $5 pizzas can do one in.

Ghost of Igloi wrote:

OK wise one, I will spell it out for you in plainly.

Take careful notes.

Price = Current S&P 500 Index level

Earnings = projected Q4 2016 non-GAAP EPS x 4

PE = Price / EPS

21 = 2370 / 112

Of course if I really wanted to burst YOUR BUBLE, I would use GAAP. Which would be:

24 = 2370 / 96

The link you posted earlier says it's 26.63. Something's off somewhere.