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Oppenheimer Holdings Inc. Message Board

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  • superbmomentum superbmomentum Apr 4, 2011 11:43 PM Flag

    A forward P/E of 6.98 times!

    I disagree with your argument and here is why:  The stock is up from 27.5 to 34.5 in less than two months...

    If I take out my abacus I calculate a price increase of $7...using my binary abacus I see a 25% increase...

    So to reiterate my point: the stock was cheap two months ago at under 10 P/E.

    This is not an attempt to prove my prediction was correct.  A stock can be cheap and can stay cheap or get even cheaper...whenever I make a prediction it's my way of ridiculing attempts at forecasting...

    As I have attempted to prove, even a novice investor/economist can be right the majority of the time...

    All I can do is try to find undervalued or overvalued stocks and hope the markets will come to it's senses sooner rather than later...(in this case it has) I do not try to predict the direction of a stock i.e. This stock will hit $50 in three months time!

    This is the specialty of equity strategists and jiggles and wiggles gurus aka chartists...(BTW they are in line in their predictions this year)!

    The equity strategist has a year end target of 1,325, so lower than where we are today but we should be invested more than 50% in equities?  Sorry folks, but that makes no sense to me whatsoever!

    Case in point: If I knew where the markets were heading I wouldn't have to diversify..

    To me, diversification is a tool appropriate for those who don't believe in the predictability of market movements!  I have no clue where markets are heading so I invest across different asset classes, sectors, regions, currencies etc...

    Likewise, a market timing strategy used by chartists is in no way in line with a diversified portfolio...

    Whether diversified or market timer, choose an investment philosophy and stick to it...that's all I'm saying....

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    • Here is an update on the issue of forecasting a flat return on equities but recommending to position your portfolio in excess of 50% in equities...

      ....although I still believe an optimal asset allocation mix should be primarily determined on the investor's risk tolerance and not stock market price predictability or forecasting ability...

      ...and although I really don't buy the short term vs long term investment strategy clarification....

      ....and although I'm pretty sure the equity allocation does not include long/short positions...

      ...however, I do like this new spin on things!  The new spin is: invest in high yielding stocks!

      ...although the S&P is trading at historic lows as far as yields are concerned...1.7% yield on the S&P on a 4.3% median [according to Robert Shiller's chart   http://www.multpl.com/s-p-500-dividend-yield/ ]....

      ...and although 80% of the S&P is yielding less than 3%...

      ....however, it is an interesting spin on things....I don't know what the average yield is on the top 20% or top 100 yielding S&P 500 companies...but let's assume it's somewhere near the 5% mark...5% equity yield vs. the lower yielding bonds is not that bad of an excuse to go long equities....

      ....although I'm assuming you are paying more inv. fees than bonds that would incrementally reduce the return differential vs. Bonds....

      ....and although you might be in a riskier asset class than bonds...

      ...however, it might actually justify the high equity allocation %s.... 

      ....so although all this may sound a bit paradoxical, it might not be strictly about an asset allocation strategy or a passive return, or a forecasting strategy or active return, as much as it is a stock selection strategy within the asset allocation strategy or the interaction effect!  OK, I'll buy that!

 
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