Comments on: EARNINGS UPDATE http://pragcap.com/earnings-update-9 Sat, 11 Feb 2012 22:06:55 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Onlooker http://pragcap.com/earnings-update-9/comment-page-1#comment-1052 Onlooker Tue, 05 May 2009 20:48:39 +0000 http://pragcap.com/earnings-update-9#comment-1052 Thanks TPC. I appreciate the feedback. I'm still learning the psychology and dynamics of the market. And sorry for harping on the foreclosure wave coming! I gotta vent somewhere. :) Thanks TPC. I appreciate the feedback. I'm still learning the psychology and dynamics of the market. And sorry for harping on the foreclosure wave coming! I gotta vent somewhere. :)

]]> By: TPC http://pragcap.com/earnings-update-9/comment-page-1#comment-1044 TPC Tue, 05 May 2009 19:24:20 +0000 http://pragcap.com/earnings-update-9#comment-1044 Don't be shocked if that happens, but as of now they're still cutting estimates. Remember Onlooker, the market doesn't go down in a straight line. As you've mentioned, it would be very rare for the market to trough at such a high PE. But that doesn't mean it can't trough in 2011 or 2012....I was actually bullish in my 2009 stock market predictions. Not because I believed the economy was going to genuinely rebound, but because I believe we came down too far too fast and it could take years for the market to digest the negativity of the de-leveraging that is actually occurring. We're seeing the false dawn in housing that I called for and as you've said dozens of times the real resets begin NEXT year. Don't be shocked if this economy retrenches hard in Q3 - Q1 of 09 and 2010....What we're definitely not getting is a sharp recovery.... Don't be shocked if that happens, but as of now they're still cutting estimates. Remember Onlooker, the market doesn't go down in a straight line. As you've mentioned, it would be very rare for the market to trough at such a high PE. But that doesn't mean it can't trough in 2011 or 2012….I was actually bullish in my 2009 stock market predictions. Not because I believed the economy was going to genuinely rebound, but because I believe we came down too far too fast and it could take years for the market to digest the negativity of the de-leveraging that is actually occurring. We're seeing the false dawn in housing that I called for and as you've said dozens of times the real resets begin NEXT year. Don't be shocked if this economy retrenches hard in Q3 – Q1 of 09 and 2010….What we're definitely not getting is a sharp recovery….

]]> By: Onlooker http://pragcap.com/earnings-update-9/comment-page-1#comment-1043 Onlooker Tue, 05 May 2009 19:19:48 +0000 http://pragcap.com/earnings-update-9#comment-1043 Here's another thought. What if the current optimism leads analysts to once again start pumping up their estimates for Q3 (I doubt they'd do it for Q2) and then we start missing on those when this great recovery doesn't really pan out (which is where we're going IMO)?<br><br>Maybe that will be the next big leg down after one of the smallest, shortest "bulls" on record. Thoughts TPC? Here's another thought. What if the current optimism leads analysts to once again start pumping up their estimates for Q3 (I doubt they'd do it for Q2) and then we start missing on those when this great recovery doesn't really pan out (which is where we're going IMO)?

Maybe that will be the next big leg down after one of the smallest, shortest “bulls” on record. Thoughts TPC?

]]> By: Onlooker http://pragcap.com/earnings-update-9/comment-page-1#comment-1042 Onlooker Tue, 05 May 2009 19:14:39 +0000 http://pragcap.com/earnings-update-9#comment-1042 Yes it's understandable why the market reacts positively when a company beat expectations. The question is why are the valuing companies so highly such that we're at such high valuations of P/E no matter how you figure them. We're in the middle of a tremendous debt deflationary contraction and the worse downturn since the GD, by most objective measures. So how can all that be "discounted" at 900 on the SP500? <br><br>I guess the investing public has been so numbed to high P/Es by the tech bubble and the debt bubble, and trained to accept that valuation, that they just can't keep their hands off anything with a P/E less than 15, much less 10. And a whole lot higher too right now. Are we doomed to never see really attractive valuations again? Or will it take another 7 years or more of a grinding secular bear to get us there?<br><br>I guess that's my take on it now. Only when we go through another cyclical bull or two (of decreasing size I'd bet), and people have lost money on today's buys, will the value investing perspective come back to the fore.<br><br>How depressing. Yes it's understandable why the market reacts positively when a company beat expectations. The question is why are the valuing companies so highly such that we're at such high valuations of P/E no matter how you figure them. We're in the middle of a tremendous debt deflationary contraction and the worse downturn since the GD, by most objective measures. So how can all that be “discounted” at 900 on the SP500?

I guess the investing public has been so numbed to high P/Es by the tech bubble and the debt bubble, and trained to accept that valuation, that they just can't keep their hands off anything with a P/E less than 15, much less 10. And a whole lot higher too right now. Are we doomed to never see really attractive valuations again? Or will it take another 7 years or more of a grinding secular bear to get us there?

I guess that's my take on it now. Only when we go through another cyclical bull or two (of decreasing size I'd bet), and people have lost money on today's buys, will the value investing perspective come back to the fore.

How depressing.

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