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agip
RE: Q scale

Ghost of Igloi wrote:

agip,

The Taper and end of QE was the first tightening and more significant than a possible quarter point move. Oil collapsed and the dollar strengthened as QE was reduced. The market moved thru 2014 and to news highs in 2015 in narrowing breadth largely thru the efforts on large institutions. Just today Oracle reported GAAP earnings of 0.40 a share on expected earnings of 0.52 a share. Naturally the hucksters of CNBC highlighted a beat using adjusted non-GAAP earnings of 0.53 a share. The ability of the market to move higher is based on the willingness of investors pay more for stocks with declining earnings and has little to do with what the Federal Reserve does. The Federal Reserve has used all of the bazookas and is left with a pea shooter and a dozen spit balls. The same is true of the global central banks.

Igy


did oil collapse because QE ended? - you'll have to prove that one to me.

you string together a lot of sentences there but I don't really know what your point is. Do some stocks have declining earnings? Yes. Do some go up anyway? Sure. Investors try to look to the future, not the past.

look.

you're basing too much on temporary factors. yes, SP500 earnings are down. But that is because of energy. And we are about to lap the start of that decline. Meaning, starting in 4q2015 or 1q2016 the earnings on the energy sector will start to rise again on a yoy basis (because their collapse started 4q 2014). Will you suddenly become bullish, seeing how earnings are rising again? Probably not - you'll find something else to talk about. But your pointing out that the sp500 earnings are falling has an end date and it is coming up soon.

same thing with your pointing out poor 15 year returns. That is ending too, as the market was collapsing 15 years ago. Pretty soon the 15 year returns will start looking like 10 year returns: +7%/yr and better. Will you stop talking about 15 year returns then?

I worry that you are only looking at today and not 2 steps ahead, down the road.

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