S&P 600: That's Gary Shilling's Forecast for 2009, Not an Index

I think Mr. Shilling is on the wrong side of the trade for 2009. Here's why: We have a lot of stimulus coming; significantly lower gas prices/energy costs; significantly lower mortgage rates causing many homeowners to refinance and free up extra money and many potential homebuyers now better able to afford a home.

I think Mr. Shilling is on the wrong side of the trade for 2009. Here's why: We have a lot of stimulus coming; significantly lower gas prices/energy costs; significantly lower mortgage rates causing many homeowners to refinance and free up extra money and many potential homebuyers now better able to afford a home.

Gary needs to update his photo in Forbes magazine. That picture was taken about fifty years ago.

Ignoring the messenger, message and the truth (predictions) doesn't stop the inevitable from happening. $40 profit estimate seems reasonable (with consumer hunkering down, rising unemployment, lack of easy money/credit, fear, etc.) but wonder whether 15x multiple is too high (markets tend to overshoot and undershoot both ways) ?

Wow! There are some people who understand economics (Shilling). He's right, you know. This bear market isn't even close to being over. 4th quarter of '09 by the earliest would be when stocks will begin to recover. If the S&P is going to 600 (I am thinking 500), where then the Dow? About 6300 is my call for the bottom, but I won't call it a bottom. wall Street has effectively eaten their own lunch and may never recover from the worst wave of corruption and deceit ever seen in America.

You guys gotta quit you're complaining. If you did'nt see this coming, well then you had your head in the sand. Plenty of $ to be made in a bear market. Punch up a graph of the historical DJ index. It's been going straight up for years with the exception of 9/11. Did you actually expect it to just continue untill it was at 19,742 or what? Let's make some money and have some fun!

At least, I think, he is right about China.

You guys gotta quit you're complaining. If you did'nt see this coming, well then you had your head in the sand. Plenty of $ to be made in a bear market. Punch up a graph of the historical DJ index. It's been going straight up for years with the exception of 9/11. Did you actually expect it to just continue untill it was at 19,742 or what? Let's make some money and have some fun!

The people here who strongly disagree with Schilling are the ones who are wearing rose colored glasses.Face up guys, you were STUPID and GREEDY and now you are trapped in a corner like a wounded rat

You guys gotta quit you're complaining. If you did'nt see this coming, well then you had your head in the sand. Plenty of $ to be made in a bear market. Punch up a graph of the historical DJ index. It's been going straight up for years with the exception of 9/11. Did you actually expect it to just continue untill it was at 19,742 or what? Let's make some money and have some fun!

his biggest flaw is going so long on the bond and not seeing how that is not going to be safe in the long run. the government is out of control in it's efforts abd tactics to avoid the pain of bad regulation, lack of regulation, failure to prosecute, internal corruption of politicans, and failure to let and make private and public enterprise eat it's own losses.

I've read Forbes for years and Mr Shilling has always been negative. Heck, if you follow his advice you'd sit in Money Markets or Bonds forever. The trick is to go with the flow. With so much money in the system the flow will be upwards if one concentrates on what it takes to rebuilding this country. I'm not a wide eyed bull....I just believe there is opportunity everywhere. Shilling sees limited opportunity anywhere and everywhere. Just ask him when he called this bear market...you could probably find out that we are always in a bear market with his advice and that is just as bad as the perma bulls. IMHO.

I agree with you, Gary, and 600 is as good a number as any other. However, I believe that number will arrive late in 2009 instead of in the 1st half of 2009. We should be getting a decent rally as soon as we hit new lows for this down move.

If you are a bear long enough you will be correct. Bulls live while alive, bears eat when hungry.....Gary should beware.

Note to those who think the stimulous packages will make things better: Huh? What's happened to the markets since the bloated $800 billion bailout was passed in Oct? How about since we all got rebates in the spring? What's that you say, they're down? How can that be? We are at the end of a long period of people spending more than they earned. Just like Japan in the 1990's, we are now paying the price for living beyond our means. Same zero percent interest rates, but our stock market hasn't plunged quite as far as Japan did - yet! This guy is right to use earnings as the basis for his projection. In the long run stocks are always priced based on earnings. Anyone who thinks that 2009 earnings will end up at $83 (for the S&P 500) is a nut. I personally think earnings next year will not even make it to $40 - more like $30. Go ahead and do the math. Now go buy stocks if you still think they're a good buy today. I plan to buy them back from you in a year or two at half of what you pay today. :-)

Armageddin..... My answer is no.......I am bullish in .2009 ....The combination of boldness by Central Bank on Monetary Front and the expected moves on the fiscal front should greatly diminishe the nightmare of deep and prolong recession.The world economy is and has retreated from the brink. Here is the previous reasons of the crisis that lead into bad situation. Us Housing Bubble,The Credit Bubble, Commodities bubble,Yen parity bubble,Oil and Gas bubble. The inter-connection of this bubbles had been a hgh degree of leverage or gearing that cause asset price to became artificily elevated. It is the deleveriging of debts rather than the predictive vision of Stock-Market ,that is behind the current set back. There is no doubt the pain and severity of recession nationally and internationally.Thru the injection of cash from the central bank with aggresive approach and packages of stimulus is an abating infact the next administration will do more bold in this packages of cash injection and moe larger stimulus will in effect revive the economy........The trouble is many of us is judging using FEAR and panic tactics BOTH MEDIA AND BIAS STOCKBROKER .... .In fact, the economy is statrting to grow next year ... once the effect of cash injection and stimulus took effect...... ANY BET......GARY SHILLINGS FORECAST IS WRONG AND HALF TRUTH.......I TOLD YOU MY REASON TO BE BULLISH....HAPPY HUNTING......

Bulls have had ZERO gain over the last 10 years. Bears with money market accounts have made 4 to 6 percent each and every year. Who do you think is the better investor? :-)

I went into all cash in 2007 and left a lot of money on the table. Now, I have been buying 2 & 3 year Cd's and preferred stock like BAC-PRH and GE-PRA with yields around 9%. I believe companies like GE and Bank of America are going to be around when this is over. I hope I'm right. My wife's IRA is in a mutual fund that has lost half it's value.

I went into all cash in 2007 and left a lot of money on the table. Now, I have been buying 2 & 3 year Cd's and preferred stock like BAC-PRH and GE-PRA with yields around 9%. I believe companies like GE and Bank of America are going to be around when this is over. I hope I'm right. My wife's IRA is in a mutual fund that has lost half it's value.

Sometimes I wonder what could happen if there was a total media blackout and we could be free of the never ending sheep herding BS form these guys. I look at it like this, at the top you heard buy google it going to 1000 and buy oil its going to 200. I would love to have at least one week where there was simply no news at all. I have great disdain for the media, and would put forth the question " Who has ever made alot of money letting the media decide for you what to do ?" Their job is to keep the little guy out at the bootm and get em in at the top, its really quite simple and sad actually.