IAAF
IAAF
Where are the Bulls?
Chicago.
Do they still have slaughter houses in Chicago?
Bill Fleckenstein is a well-known BEAR and he's been around so long that I'm sure he makes money at it. This is from his blog:
You only want to build a short position that is working, not one that is going against you, but when to press that position also takes skill (timing).
As for mom and pop, they can lose their profits in many more ways, it doesn't have to be a crash. Slow declines are often even more seductive.
Hope is not a strategy.
The activist Fed era begun by Greenspan has completely changed how the stock market functions. And it is really only safe to be short once the Fed has lost credibility as it did temporarily after both bubbles.
As for patience, waiting before taking action is very hard to do sometimes, but it is absolutely crucial.
You really do need to know your own tendencies to avoid repeating mistakes.
https://www.fleckensteincapital.com/fleckthoughts.aspx
I'm quite sure that Bill is not fighting his own statement about the FED.
We clearly have a rotation going on with stocks benefiting from low interest being replaced by stocks benefiting from higher interest rates. If people want to claim that the entire market is overvalued, I find it interesting that nobody is mentioning financial stocks like BAC, WFC, JPM, and C. They have PEs under 20 and are going up. The last time the FED hiked rates in 2004, these companies went up 20-40% before the top. If you want to be shorting stocks (I am not short stocks, only a bunch of commodities), I would think that real estate would be a prime candidate.
coach d,
Financials have a lower PE accounting for the fact that use other's money to generate profits. In the 2004 time period these firms were making large profits on the back of re-packaging mortgages and generally improvement in the stock and bond markets. Even though many of these firms profits will improve in part with higher interest rates, they will be hurt if their is a decline in trading volume, IPOs, spin-offs, mergers and acquisitions. If your view is correct that we are in the middle of a higher run up then no problem.
Igy
Isn't making money what it's all about?
Hello,
My comment was historically the financial sector has a low PE ratio due to the nature of their business. On the other hand, the technology sector with its ability to grow faster than the market has generally carried a higher PE. Both sectors make money but are valued differently by the market.
Back at ya!
Igy
S&P 500 Sector
EPS Growth
Sector ETF
1-year returns (as of 11/9/15)
Energy
-58.6%
XLE
-20.8%
Materials
-14.6%
XLB
-8.1%
Consumer Staples
-2.0%
XLP
2.1%
Financials
1.2%
XLF
1.0%
Utilities
1.5%
XLU
-8.5%
Information Technology
4.6%
XLK
7.2%
Industrials
5.1%
XLI
3.4%
Telecommunication Services
14.6%
XTL
2.3%
Health Care
15.0%
XLV
4.8%
Consumer Discretionary
15.8%
XLY
17.7%
S&P 500
-1.6%
1.9%
No doubt this will be hard to read, but it shows EPS growth by SP sector - clearly collapse in energy and material company earnings are covering over solid eps growth in almost every other sector.
That's why the market is holding up despite declining overall SP500 earnings - declining energy profits are not a result of the economy - declining energy profits are a result of falling energy prices. Normal economically sensitive companies are doing well.
agip,
According to S&P Capital IQ as of 11/5/2015. Stock buybacks are "adding at least a 4% tailwind to their current EPS." 437 companies have reported and Last Twelve Months (LTM) S&P earnings are tracking at $90.18 a share. LTM for the 3rd quarter of 2014 was at a all time peak of $105.96 a share.
Igy
Ghost of Igloi wrote:
agip,
According to S&P Capital IQ as of 11/5/2015. Stock buybacks are "adding at least a 4% tailwind to their current EPS." 437 companies have reported and Last Twelve Months (LTM) S&P earnings are tracking at $90.18 a share. LTM for the 3rd quarter of 2014 was at a all time peak of $105.96 a share.
Igy
yeah - would be good to see net income instead of eps
agip,
That's the problem, corporations are massaging the numbers to hit the EPS. All done I might add to juice the stock price. It can only function this way for so long.
Igy
"The 10 largest stocks in the S&P 500 have contributed more than 100% of the year's roughly 2% gain," researchers from Strategas Research Partners wrote in a note, according to USA Today. "By comparison, both 2013 and 2014 saw the 10 largest stocks contribute less than 20% of the year's advance."