stock market thread

[dms26 3]

Over 60% of stocks in the S&P 500 have P/E of less than 10. A level not seen since the early 80's.

Do you think these companies will be able to make as much next year as they do this year though?

[El Guapo 8]

Do you think these companies will be able to make as much next year as they do this year though?

Completely company dependent right now. Some are way de-valued for no reason other than overall economic bad news. Some will be worse than predicted.Stock market is a leading indicator, so a lot of the future bad news is priced in. As long as the specific companies do not fall way below their future earning estimates, they will be ok.For instance, GS at a P/E of 3.83 is ridiculously low. Can it go lower, sure, do I think it's a great buy, absolutely. Especially if Warren Buffet thought it was great buy at 115 and now's its ~60.

[Yoda 1]

We are at a major inflection point and I am still not sure which direction the market will go. Is the worst behind us in the economy? Absolutely not. But the stock market IS forward looking and you have to wonder when it will be priced in. My gut tells me there could still be another big washout but my general market optimism doesn't want this to be the case. But long term bargains are everywhere and every time we have had another whoosh down it has been a great buying opportunity.I guess what i'm saying is, I am not comfortable betting largely in either direction at this precise moment. Being able to play both sides and put hedges on with shorts and ultrashorts is imperative. You gotta take profits when you can, in both market directions.

[mtdesmoines 3]

Good point. The more debt we add, the more that will have to be wiped off in default.....Consumers need a way they can continue to spend 110% of their incomes, forever, without ever having to pay for or on any of the debt. U.S. automakers need to get out from under $100 billion in excess debt, then figure out how to be competative with a $45 an hour total cost of compensation when the Japaneese pay $25 an hour total cost of compensation. Unions are great for the workers short-term, but long-term the business need to either be a monopoly (railroads), government, or... a non-unionized business will come along and slaughter you.

Because this ^^^^^ is really what this "correction" is all about. Starting points ... ? ...1. making labor scarce by exporting the illegals depressing the labor market2. import less (you decide how to do that)3. make more domestically (shore up our manufacturing base)The real trick for Obama is going to be figuring out how to raise incomes without stimulating hyperinflation. Good luck. Buckle up.

[WrongWay 0]

Because this ^^^^^ is really what this "correction" is all about.

Right. For 2 decades, incomes have not kept up with inflation but we've been able to borrow the difference. Now that debt is going bad and consumers are being forced to live within thier means, and that is BAD news for busnesses large and small. They ALL want bailouts... but from what? How can businesses operate in an economy where thier customers have no money?Starting points ... ? ...

1. making labor scarce by exporting the illegals depressing the labor market

While I don't disagree, there are negative side effects. If the 30 million illegals leave, that is an extra 5 million too many houseing units on top of the 5 million too many housing units we already have. See the builders are now asking for TRAP money? Why? So they can keep building houses and adding even more houses to the massive oversupply?Not to mention the large number of businesses that will just move South of the Border. Can't use illegals to slaughter chickens in the US, just move your chicken farm across the border. Without teriffs, which the Republicans will fight tooth and nail, just exporting the illegals will not make labor short here. It will just relocate the jobs.One positive of pusing the jobs South of the Border, at least I won't have to pay the taxes to pay the medical bills of the illegals or to send their kids to school.

2. import less (you decide how to do that)

Print so many dollars that we kill the dollar on international exchange markets, making imported goods more expensive and increasing the profits on our exports. We tried this, but unfortunatly, the rest of the world has tried to kill their currencies too, making the dollar rise in relation. Of course, this also causes inflation on all imported goods, like oil.

3. make more domestically (shore up our manufacturing base)

Again, how? When a software company can hire three programmers in India for the price of one in American, how do we convince them to hire an American?Welcome to globalization.

The real trick for Obama is going to be figuring out how to raise incomes without stimulating hyperinflation. Good luck. Buckle up.

It is virtually impossible for the government to do ANYTHING to increase wages. Large sectors of our economy are imploding sending unemployment skyward, while jobs continue to be off-shored.Without increasing wages, inflation it counter productive.

[WrongWay 0]

We are at a major inflection point and I am still not sure which direction the market will go. Is the worst behind us in the economy? Absolutely not.

Wow, you're getting very "wrong way-like".

But the stock market IS forward looking and you have to wonder when it will be priced in.

Are the markets pricing in 15% unemployment, a 30% decline in GDP, $3 trillion in losses from residential real estate on 10-15 million foreclsoures, $3 trillion in losses from commercial real estate and business bankruptcies, 25% decline in consumer spending....If not, then all the bad news is not yet priced in.We're still in the early stages of this. We're still seeing total mortgage debt increasing as new loans are outpacing foreclosures. We're still seeing total consumer debt increasing. We're still seeing total business debt increasing. We have not yet cut off access to debt to the degree that it needs to be cut off, and have not BEGUN to deal with the massive default that is coming.Oh, we're at a major inflection point. What has yet to be seen is 1) Greater Depression or 2) hyper-stagflation?

[Sal Paradise 57]

Are the markets pricing in 15% unemployment, a 30% decline in GDP, $3 trillion in losses from residential real estate on 10-15 million foreclsoures, $3 trillion in losses from commercial real estate and business bankruptcies, 25% decline in consumer spending....

yeah they are

[HollywoodAFD 0]

Sell GM stock....hurry !

[Yoda 1]

Sell GM stock....hurry !

Little bit late therrrrrre chief.

[WrongWay 0]

People go mad in crowds, but return to sanity one at a time....http://www.cnbc.com/id/27801738"I cannot find a way to predict that the recession that we are in will be short and sweet. U.S. economic growth over the last quarter century has been achieved on the back of a huge surge in consumer debt, and the lenders now want to get paid back. The only way to pay back those lenders—the banks and the credit card companies—is to forego purchasing something else."She's half right. Don't forget non-financial sector business debt which has exploded from $3 trillion to $11 trillion in 15 years.The truth is, the debt WON'T be paid back.$25 trillion in consumer and business debt, up from $7.25 trillion just 15 years ago. ATLEAST $10 trillion of that is going to default with well over $5 trillion in actual losses. Honestly, I would not be surprised if it is more like $15 trillion in defaults with $10 trillion in real losses.We're going to see atleast $4-5 trillion in bad residential mortgages costing over $3 trillion in real losses. Losses from commercial real estate will be every bit as bad, then add on $1-2+ trillion in losses from other consumer debt and then a few more trillion in other business losses.Her solution is to get out of stocks and into corporate bonds... Out of the fire but into the frying pan...

[WrongWay 0]

yeah they are

Sorry, but wrong. No way is a 20-30+% drop in GDP priced-in when the S&P 500 is still trading at a 16 P/E based on trailing profits.

[Sal Paradise 57]

Sorry, but wrong. No way is a 20-30+% drop in GDP priced-in when the S&P 500 is still trading at a 16 P/E based on trailing profits.

nah, pretty sure it is.

[mtdesmoines 3]

People go mad in crowds, but return to sanity one at a time....http://www.cnbc.com/id/27801738"I cannot find a way to predict that the recession that we are in will be short and sweet. U.S. economic growth over the last quarter century has been achieved on the back of a huge surge in consumer debt, and the lenders now want to get paid back. The only way to pay back those lenders—the banks and the credit card companies—is to forego purchasing something else."She's half right. Don't forget non-financial sector business debt which has exploded from $3 trillion to $11 trillion in 15 years.The truth is, the debt WON'T be paid back.$25 trillion in consumer and business debt, up from $7.25 trillion just 15 years ago. ATLEAST $10 trillion of that is going to default with well over $5 trillion in actual losses. Honestly, I would not be surprised if it is more like $15 trillion in defaults with $10 trillion in real losses.We're going to see atleast $4-5 trillion in bad residential mortgages costing over $3 trillion in real losses. Losses from commercial real estate will be every bit as bad, then add on $1-2+ trillion in losses from other consumer debt and then a few more trillion in other business losses.Her solution is to get out of stocks and into corporate bonds... Out of the fire but into the frying pan...

I don't think all these debts will be written OFF. I think they will be written DOWN. So it may not be as completely bleak as you make it sound. I DON'T think municipal bonds (based on taxable assets) are going to be able to perform at all. I don't think your money is going to disappear. But I think munis are going to be pretty sick for a while.

[mk 11]

everything is a complete gd random walk these days, flip a coin, make or lose a fortune....

[El Guapo 8]

everything is a complete gd random walk these days, flip a coin, make or lose a fortune....

Have you been flipping good or bad?

[brvheart 1,751]

I'm looking to acquire some more personal and business debt before I go bankrupt. Anyone have any ideas?Also, I'm glad I sold 20% of my BAC at 33, and I'm glad that I have over 50% of my holdings in silver and gold right now.

[El Guapo 8]

I'm looking to acquire some more personal and business debt before I go bankrupt. Anyone have any ideas?Also, I'm glad I sold 20% of my BAC at 33, and I'm glad that I have over 50% of my holdings in silver and gold right now.

You could call up GS and see if they have any sweet MBS they would like to sell you on the cheap.

[HollywoodAFD 0]

Little bit late therrrrrre chief.

Dangit ! ! Cuban was supposed to call me

everything is a complete gd random walk these days, flip a coin, make or lose a fortune....

I've "lost" over $35,000 in the past 8 months...but not really. The mutual funds I'm in have performed for over 20 years and will bounce back so I'm actually buying more since the price is down. After 9-11...I lost about $70,000 and it took 3 friggin years to get it back but the portfolio increased faster for the next 2-3 years.I shredded my last statement because the information is really worthless right now.

[WrongWay 0]

I don't think all these debts will be written OFF. I think they will be written DOWN.

Yeah, that is why I said $10 trillion in defaults with $5 trillion in actual loss. $5 trillion in write down on $10 trillion in bad debt.... AT LEAST.

[WrongWay 0]

Dangit ! ! Cuban was supposed to call meI've "lost" over $35,000 in the past 8 months...but not really. (clip)I shredded my last statement because the information is really worthless right now.

I leared my lesson in the tech wreck. No more riding down for me. No believing we're at the bottom just because EVERY "expert" is saying we are. No more believing it is a great buying oppertuinity as bankruptcies near.First in get the profits. First out keep the profits. Last in eat the losses.I decided to be among the first out this time. Still not at the bottom yet.

[WrongWay 0]

I'm looking to acquire some more personal and business debt before I go bankrupt. Anyone have any ideas?Also, I'm glad I sold 20% of my BAC at 33, and I'm glad that I have over 50% of my holdings in silver and gold right now.

If you can get a 100% LTV loan, I'll gladly sell you my house for current market.

[brvheart 1,751]

Yeah, that is why I said $10 trillion in defaults with $5 trillion in actual loss. $5 trillion in write down on $10 trillion in bad debt.... AT LEAST.

That's a relief. I thought this was a bigger deal.

[nutzbuster 7]

So I dump the GTI, get the beemer (Almost a wash cost wise, a little higher payment) and then this from work... * Elimination of 500 jobs (200 thru retirements, open slots left unfilled); * Elimination of the scheduled COLA;(cost of living adjustment) * Market adjustment eliminated for Police Department; * Merit suspension for one year beginning January 1, 2009; and * Base pay reductions (2% for all employees) effective January 5, 2009**** me. I am scheduled to retire from the City in a little over a year. Take those cuts and add in a scheduled increase in the retirement fund contribution in July, and my last year here, if you include inflation and cost of living increases, I will lose approx. 8 grand. And that lost income will count towards my retirement, which will effect me for the rest of my life.Plus I've been in the market since June. Oh man....gotta love that....getting pounded so hard. I am in too deep to bail now.I guess I should be happy...I still have a job at least, but holy fuk. Talk about the perfect storm.YAY (not)Hope everyone is weathering this shit better than moi.

[HollywoodAFD 0]

So I dump the GTI, get the beemer (Almost a wash cost wise, a little higher payment) and then this from work... * Elimination of 500 jobs (200 thru retirements, open slots left unfilled); * Elimination of the scheduled COLA;(cost of living adjustment) * Market adjustment eliminated for Police Department; * Merit suspension for one year beginning January 1, 2009; and * Base pay reductions (2% for all employees) effective January 5, 2009**** me. I am scheduled to retire from the City in a little over a year. Take those cuts and add in a scheduled increase in the retirement fund contribution in July, and my last year here, if you include inflation and cost of living increases, I will lose approx. 8 grand. And that lost income will count towards my retirement, which will effect me for the rest of my life.Plus I've been in the market since June. Oh man....gotta love that....getting pounded so hard. I am in too deep to bail now.I guess I should be happy...I still have a job at least, but holy fuk. Talk about the perfect storm.YAY (not)Hope everyone is weathering this shit better than moi.

This is Phoenix? Holy cow!Did you put your stuff in bonds for your last year or at least move it to lower risk funds?

[Yoda 1]

Shorrrrrrting. Golllldman. Ittttt's like banking coin. ^^ Poor attempt at a song/poem.We're at that level now where I have to tell my parents, and my parents parents, listen. If we crash from here you have to take your savings and start to invest that shit. Like, for serious.My dad was telling me earlier that my grandma has 95% of her money in CD/money markets, due to my uber frugal late grandfather. GOOD for freaking her. Now lets start putting the money to work and pay for the great grandchildren's college.