Definitively, Igy, what will you do when it does?
Definitively, Igy, what will you do when it does?
Maserati,
I am sure it sounds delusional, but I will begin to add stock positions at S&P 1,300. I arrive at the figure by multiplying the $86.50 in current earnings times a 15 multiple which gives you 1,300. Since markets overshoot to the downside 1,100 is probable. Knowing that I will never pick the top or the bottom I will add over time.
Igy
You arrived at that figure because that's what Stockman told you. You're a one trick pony, Igy.
Ghost of Igloi wrote:
Maserati,
I am sure it sounds delusional, but I will begin to add stock positions at S&P 1,300. I arrive at the figure by multiplying the $86.50 in current earnings times a 15 multiple which gives you 1,300. Since markets overshoot to the downside 1,100 is probable. Knowing that I will never pick the top or the bottom I will add over time.
Igy
In 2007, the SP500 earnings were 82.54.
In 2008, the SP500 earnings were 49.51.
In January 2009, the SP500 PE was 70.91, and it didn't get below 15 until 2012. In January 2002, the PE was 46.17, and it almost got to 17 in 2007. In a big recession/bear market, earning don't just fall by 5%; They fall like a rock, and they stay low for a long time.
I don't care what Ben Graham did in the 1930's. You can't do this in today's markets. Your clients won't make any money, because you won't be in the market until right before the next top. In the 1950's they had SP500 PE figures in the 7-13 range. You do not get that in the broad markets these days.
Has China's slowdown bottomed out? Growth at 6.7 pct in 1Q
POTO,
I actually did the math without Stockman's help. It is pretty simple, if LTM falls to $83 Q1 2016 times a 15 multiple fair value becomes 1,245.
Igy
coach d,
I agree that using a low PE would be the wrong marker. I am using the calculation to determine fair value of the S&P 500 based on Last Twelve Month (LTM). It is very common calculation even used by Goldman Sachs to determine fair value levels for the index. Wall Street uses forward operating earnings rather than GAAP which lends an upward bias to the projection. If you go to the S&P 500 website Howard Silverblatt has spreadsheet data on both As Reported (GAAP) and Operating (non-GAAP) quarterly data going back over decades.
In regards to the 6.7 GDP data out of China, perhaps this is a bottom. I was watching CNBC Asia when the news broke and host Bernie Lo ( University of Idaho, MA) laughed at how the number came in spot on projections. IMF worries that the China slowdown continues.
Igy
agip,
I had my best AlterG training session last night. I was training at 90% of body weight, ran a total of 8 miles with warm-up and cool-down. The meat of workout was 3 x mile @ 6:18 with a mile recovery jog of 8:00 between.
Good luck on your upcoming race.
Igy
POTO,
Here is the latest from Stockman, which I happen to think is spot on.
http://davidstockmanscontracorner.com/more-bull/
Igy
Of course you do.
Hi, K5! Are you butthurt that I haven't been banned? Don't you think posting anti-Semitic propaganda is worse than me posting that you're butthurt? I do.
Stock index futures signaled a nervous day of trading on Friday, as oil prices slipped following reports that Iran's oil minister won't attend the weekend meeting of big oil producers. An update on China growth came in as expected, though it inspired some hopes that the country's stimulus policies are starting to work.
Dow Jones Industrial Average futures futures tipped 24 points, or 0.1%, lower to 17,819, while S&P 500 futures were down 3.9 points, or 0.2% to 2,072.50. Nasdaq-100 futures dropped 8.5 points, 0.2%, to 4,537.50.
The S&P 500 index and Dow industrials notched new 2016 highs on Thursday, albeit via modest gains after disappointing bank earnings. Those indexes were poised to gain 1.7% and 2%, respectively, for the week, with some investors wondering whether Wall Street has been too downbeat with its expectations for the first-quarter earnings season.
The S&P 500 is now 2.3% away from its high of 2,130.82, reached May 2015, and many believe 2,100 isn't far off for the index. Joel Kruger, an FX strategy consultant to LMAX Exchange, said that level is within reach, though it has met plenty of resistance in the past from the market. That 2,100 level is where he believes "a rally that has truly lacked any good meat will once again be exposed," he said in emailed comments.
Doha casts a shadow: Oil prices may influence stock action. The negative direction for stock futures was so far contained, but oil futures fell into the red on a report (http://www.marketwatch.com/story/oil-slides-after-report-confirms-iran-oil-minister-will-skip-doha-2016-04-15) that Iran will not send its energy minister to the key oil producers' meeting in Doha, Qatar, on Sunday. The report said Iran's Organization of the Petroleum Exporting Countries governor will still attend the summit, which is expected to discuss production curbs to balance the oil market.
Iran has rejected calls for an output freeze, which would complicate its desire to return to pre-sanction levels before reining in production. But the world's largest oil producer, Saudi Arabia, had previously indicated that it won't agree to a Doha deal unless Iran signs.
"Our expectations for the meeting are low. Although an agreement on production caps is likely to be reached, it will probably not include any concrete figures or obligations, let alone any sanctions to be imposed in the event of noncompliance," said analysts at Commerzbank in a note to clients Friday.
Ghost of Igloi wrote:
agip,
I had my best AlterG training session last night. I was training at 90% of body weight, ran a total of 8 miles with warm-up and cool-down. The meat of workout was 3 x mile @ 6:18 with a mile recovery jog of 8:00 between.
Good luck on your upcoming race.
Igy
sounds good but I don't know how to do conversions to regular running. But it sure sounds good. And best is best.
Just use restraint!
I'm not racing for a few weeks - it's taking me some time to recover from back to back 10ks - ah aging. legs feel very heavy.
agip,
I am trying to be prudent.
The conversion would be that you a training as if you weighed 10% lighter. I would estimate my ideal racing weight as a 65 year old to be 10-15% less than I am today. I have been increasing the percentage up over time and at some point once the weight is off and the limbs are stabilized I will be off the AlterG.
Igy
from factset on the 1Q earnings season - revs would be positive without the energy sector. Earnings would still be negative without the energy sector - something like negative 4%.
(The energy) sector is also expected to be the largest contributor to the revenue decline for the S&P 500 as a whole. If the
Energy sector is excluded, the estimated revenue growth rate for the S&P 500 would jump to 1.7% from -1.2%.
econ:
Empire state mfgring index took a very large jump: now at the highest since around january 2015.
but nationwide industrial production fell again: -0.6%
consumer sentiment fell a little but fairly stable.
maser, db is up 13% in something like a week....
but that's in dollars in ny - maybe there is some currency effect there.
and certainly the stock is still down 50% from a year ago.
Toucan,
Just like one of your friends in the rain forest, Jim Cramer is a Chameleon. He will change colors to blend into the forest when the market moves the other direction.
Igy