Everyone is hiding in the Russell 2000. Do a google for "Wall Street Journal p/e ratios" and click the first link. Russell p/e is 81.61. Seems a little high maybe? Considering the historical average is under 20.
Biotech sector is the poster child for it, look at GALE they admitted to hiring a pump and dump team, they have no business prospects other than a drug with limited market and no chance of approval and they have almost a 400 million market cap? Hey I guess it's a better deal than when it somehow had about $1 billion market cap a couple weeks back. Seriously, #$%$.
It's been strong-ER. It has been incredibly weak by the standards of every other recovery. In my opinion current stock prices are factoring in 10% GDP growth for the next 10 years when we will get at best 2%. However I do agree we will see on average positive growth rather than a recession. The question is, does 2% growth mean we should pay 80 times earnings for the Russell 2000 (current trailing p/e is 81)?
The more interesting question is could there ever, ever, ever be a down year in the US stock market again no matter what occurs in the future Is it even possible? In what universe could US stocks ever decline? I mean they're incredibly overvalued but there is never, ever, ever any profit taking of any kind at any time for any reason and in any amount. Nobody EVER sells to book a profit no matter what occurs.
The default for the market is not flat, but +100 on the Dow. If you want anything less than +100 on the Dow you need absolute catastrophe. Today's jobs report was quite dismal and in a normal economy would be seen as signs of real trouble. Instead, up we go. I'm done- see ya'll in 2015.
Lots of chatter now about no resistance now, best on a bad block, blowoff top, etc. To me with the Russell 2000 trailing p/e now in the low 80s versus a historical average under 20 we're getting a little crazy but I do believe they will print 2000 minimum on S&P before a drop. Probably an overshoot so maybe 2100 this year? Bad news is always ignored and "good" news is never expected. Today's jobs report would be treated as utterly dismal in a normal economy but as weak as ours is it's greeted as a miracle. Never mind that all the jobs are minimum wage, workers don't need money right?
We get it buddy, you are missing the rally. We know your posts about buying the dips are sarcastic. Don't feel bad, John Hussman has lost 20% during a 200% rally in S&P I doubt you've done worse than that.
Yes. Anything good is good. Anything bad was the weather. They will use this excuse regardless of what the weather is. The weather will always be too hot too cold or too medium, so we can never see a market drop.
Yes it does look tempting. I am itching to get in on the short side but these boys are really powerful. Stocks won't go down until they're ready for them to unless there's an exogenous event. The really interesting thing that I think makes this unique is even the bulls are admitting stocks are overpriced, using the best on bad block argument again. All in all, it feels so much like 2007/08 top it's scary. I don't see much upside in the market, maybe a max of another 5% and the downside is incredible.
Yep lot of people will be caught with their pants down. Once the Fed is out we're likely to see a big event sending VXX up maybe 150% in a month or two, and wiping some folks out. I would hate to see that happen but I don't see any way around it.
This is unbelievable. I know that word is overused. But really, I mean it- I cannot even process what is going on with stocks at 1999/2000 levels on many metrics (p/sales, Tobin's Q, etc). I am throwing in the towel until a correction.
Thanks. Will research this more. I have plenty of time since I'm sitting on my hands waiting for something to happen. That Russell pe is just wild, can't understand why people think it's OK to have stocks at basically any p/e ratio, 100, 200, whatever. And some of them use the "Ex losses" p/e which is a joke. Oh well, something will break at some point, not going to chase this junk market.
I have a good friend in "the industry" who has had a very successful career. Ran the RUT by him and he did a double take. He feels it would take nearly a 45% drop to get it to a point where he is interested. Luckily he makes strong returns in other areas so he doesn't need to be long stocks. I don't understand why nobody is looking under the hood at some of these things. I mean 81 trailing p/e for the Russell 2000? Huh?
What a bargain! The higher the better, right?
Gentlemen call me crazy but I think I'm out of stocks until at least 1500 if not lower. Would short TNA heavily if I could get the shares. The Russell 2000 trailing p/e according to the Wall Street Journal is almost 90. Something is amiss here.
Exceptionally boring. There is literally NOT A SINGLE CHEAP STOCK IN THE MARKET. Not a single one. I think I'm going to be mostly in cash for a long time. Would short TNA but no shares available. Will never buy TZA because of the decay. Just boring as sin, this BS market. I don't wish anyone to lose money but we really need a reasonably valued market for people in their 20s and 30s to invest in. That's assuming they have any money with the dismal job market and tons of student loans. We must have more reasonably priced stocks and normal interest rates. The adjustment will be painful but the longer we go the worse it will be. The Fed has done almost unbelievable damage to this economy and to future generations.
I would love to see the S&P get down to Hussman and Grantham's 1150, as well as reasonable interest rates for retirees. It just doesn't make sense in the long run for the Fed to keep all assets overpriced and interest rates at 0. They're not doing anyone (besides Wall Street) any favors.
This market is in desperate need of a big washout. It's really not fair to future generations to be stuck paying such crazy multiples for stocks. John Hussman, Jeremy Grantham, p/e ratio, Tobin's Q all suggest about 1150 as fair value right now. We will probably not get that low but I would love to see that, as well as decent fixed income opportunities so people of all ages can actually have decent retirement planning options. The Fed should never have manipulated the markets this long.