Tuesday, February 17, 2009

Stocks Melt

Another ugly day at the equities purchasing parlor, so it's appropriate to display this:

The chart comes from Bronson Capital Market Research (via Barry Ritholtz's "The Big Picture"). BCMR explains:

"The stock market Price/Earnings ratio (the solide blue line) is the S and P 500 Index ... divided by earnings ..."

Bronson graphs the ups and downs of the ratio, and predicts that the bottom of the market will come somewhere around October 2014.

It's as good a forecast as other predictions out there. Maybe better. We'll know how it holds up when the autumn leaves fall in 2014. (Click on the chart for readable text and more detail.)


Anonymous said...

William Bernstein once wrote that young investors should get down on their knees and pray for a crash, so that they could buy their nest egg at firesale prices.

I guess those prayers are now getting answered. :^o

Anonymous said...

talk about losing all faith in your government and so called leadership. Its like a bunch of crooks and double speaking con men are running a muck in D.C. and we're all being robbed as we sleep.

Anonymous said...

I know. The last 8 years have been an incredible disaster. While everyone is VERY glad bush is gone, President Obama has obviously been thrown in his fire. The good thing is President Obama has attached strings and accountability to taxpayer money being given out. Something bush & co. didn't do--they just gave it away. And the banks they gave it too still haven't begun lending again, as they said they'd do.
After extensive conversation with republicans in approving the current bailout, he aquiesced to two of their biggest concerns, only to have them whine about not being consulted. republicans ought to stop playing partisan politics and take responsibility for the last 8 years of terror on the American Citizenry.

Anonymous said...

That said, it sure is nice to have a Man who can THINK in the White House for a change. Someone who obviously cares more about the country than himself, like petty pissants dick and bush.

Anonymous said...

Bush is gone. Lets not give this guy a pass just because his name isn't Bush. We should hold every President accountable for making bad decisions for the American people. This is not going the way most people had HOPED.

Anonymous said...

President Obama just banned "four accounting gimmicks that President George W. Bush used to make deficit projections look smaller." The new numbers look brutal, but I'm glad to see more government transparency.

Anonymous said...

As an independent, its very easy for me to ask this...the last comment above about transparency is a joke, right?

Anonymous said...

"the last comment above about transparency is a joke, right?"

I sure hope so. This blind Obama worship is pretty sickening.

Bush and Obama are interchangeable. Both have destroyed our constitution.

Second verse, same as the first.

Steve Hulett said...

No. Transparency is relative. We have more of it now. But we don't have enough of it.

I always found it bizarre that the hundreds of billions spent on Iraq were kept "off budget."

Like, it was a surprise when this line item popped up every year? Nobody ever anticipated it?

Transparency or not, we're going to have a few brutal years ahead of us. Batten down the hatches.

Anonymous said...

agreed! this latest group is throwing even more good money after bad. hope we can make it till the next election again.

Anonymous said...

Obama has been in office *almost 2 months* now, and STILL hasn't fixed everything? Unbelievable (and I'm not referring to Obama).

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