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Seagate Technology Public Limited Company Message Board

  • v1kes_won v1kes_won Nov 16, 2013 2:42 PM Flag

    Bubble Brains

    As we wait for the SP to clear 1800, the DJIA going through 16000, and the NAS breaking out over 4000, a couple of reflections.

    It gives you a real insight about the type of people who use these boards, when after telling everyone to load up early this year all I get are two responses from a ranting lunatic now under investigation for felony assault and a loser right wing nut case.

    C'est la vie mes amies!

    While the hedge fund parasites and the buy side losers who missed this rally are now whining about a bubble, LOL!

    Based on the consensus SP earnings for 2014 of $123, and using an average P/E of 15 you get a 1860 target. The trailing P/E based on the last 12 months is 15.8 versus an average of 16.9 since 1999. For those wringing their clammy hands about the four year bull run lifting the DJIA by a a factor of 2.6, consider this:

    The 1982-2000 secular bull market saw the DJIA go from 800 to 11,000! The SP500 traded at a multiple of over 20 for several years before the 2000 bubble burst.

    Now what is the reason for this irrational exuberance?

    1. 73% of the firms beat their September estimates
    2. Interest rates and inflation both remain low and there are several reasons why they won't go through the roof after the Fed tapers: a 4% increase in 10 year T bills causes the debt to rise over $500 billion, US energy costs going down in the long term, population demographics-Baby boomers will save rather than spend,

    Speaking of the baby boomers, as they retire jobs will open up. China is faced with the same problem, the Chinese labor force is expected to lose 67 million workers between 2010-30 which will pressure wages.

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    • Another great post

    • “It gives you a real insight about the type of people who use these boards, when after telling everyone to load up early this year all I get are two responses from a ranting lunatic now under investigation for felony assault and a loser right wing nut case.”

      Since you use this board as well Vikes….consider yourself included in the dysfunctional and socially challenged membership rolls of the Yahoo message boards.

      What’s the matter Vikes? Is your overly inflated self worth actually hurt by a lack of response from those you just criticized? Do you require “thumbs up” ratings to feel good about yourself? Perhaps you weren’t held enough as a small child so now you turn to a yahoo message board for love and encouragement? I actually feel sorry for you.

      As for Obamacare….you’re seeing the beginnings of a major shift in public sentiment toward the Democratic Party and liberalism. The voting public knows it been lied to and they don’t like it. Obamacare was destine to fail but his numerous deceptions just sealed the deal for republicans in 2014. Now his own party is turning against him. He’ll be persona non-gratis during the upcoming democratic campaigns. It’s going to be fun to watch. Too bad he had bring down so many innocent people health coverage in the process….but of course he knew that from the beginning. He just didn’t care.

    • Blondie the grossly over rated YHOO CEO won't let you post exceed 400 characters, so I would like to follow on the previous post about labor in China. The Chinese workers have become very aggressive in their labor demands. BTW, who can blame them when Foxconn has to install nets to prevent their workers from jumping to their deaths?

      Since 2003 the cost advantage of manufacturing in China versus the US has shrunk from 18% to 7% and is likely to go lower as the Chinese population ages and Chinese energy costs rise versus the U.S.

      So let's add up the balance sheet to help all the bubble brains out there:

      1. By numerous historical measures, we are no where near a bubble.
      2. Inflation will remain low
      3. Even after the Fed tapers, interest rates will still be modest compared to historical norms
      4. Jobs will open up as the baby boom retires
      5. The advantage to manufacture in China is disappearing.
      6. The U.S. will become an energy exporter
      7. With gold in the doldrums, rising rates driving bond prices lower, Europe still is recovering from life support, where are you going to put your money?
      8. Most of the retail crowd still has not joined the party.
      9. The stock market rise coupled with rising home values has restored a lot of the wealth lost during the recession.

      So think about it Buffy, let's party like its 1984 all over again!

      • 1 Reply to v1kes_won
      • I think using the term bubble is too broadly applied to the US equities, it's certain areas of US equities that look bubbly...you know, the feeling that internet 2.0 and solar and 3D printing and trendy restaurants are way out on a limb, and we see IPO's trade too high...it does remind me of tech at the end of last century. I think people don't recall how much more stock specific that correction was...a lot of non-tech names did just fine even as the Nasdaq got cut by 75% or so in a couple years.

    • V1kes, what are your thoughts on the market effect when the proverbial you know what hits the fan in a year when the FULL ramifications (mainly the delayed employer mandate) of the ACA are finally visible?

      The only plus I see is there is going to be a tremendous data storage need in the insurance industry, medical records keeping, and government servers. As a retired Engineer, the complexity of the ACA boggles my mind. Every time some one tweeks a little gear or cog over here or there, 10 others break down.

      • 1 Reply to quickdrawhawk
      • Interesting point, but even without that the demand for data storage will grow 35% annually.

        Certainly, the Bronco Obummer team dropped the ball badly and their critics are naturally having a field day.

        The problem is the two greatest threats we face as a country are the crooks on Wall Street and the dysfunctional, greedy health care system. I have heard far too many horror stories about the crooked insurance companies dropping coverage of very sick people or families going bankrupt due to medical bills. I remember testimony on TV to a Congressional committee by an ex claim examiner from a major insurance firm. Her instructions from her employer was to give those making large claims the run around. Shameless, the last thing you need to deal with is to get hassled when you have a serious medical problem.

        BTW, if Obamacare is going to destroy the health care system why has Aetna's share price doubled over the past two years?

        Health care costs rose 120% from 2000-09 and were expected to rise more this decade. So that would put the cost for a policy for a family of 4 around $40,000, versus the median U.S. family income of $52,000. So many of the cake eaters who now have insurance will be left out in the cold. Maybe they would change their tune then.

        My son just got "good news" from his employer, his health care costs are "only" going up 17% this year.

        I read in Ted Cruz' district a significant portion of his supporters are either too poor or too dumb to have health care. Should they dictate how this country deals with the problem?

        Obviously, Obamacare is a poor solution, but unless a better one is proposed, it's the only one we have. We need solutions, not a dysfunctional government where the primary goal of each party is to undermind the other party.

 
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