It's reasonably valued if you believe the forecasts. However, I believe the earnings forecast for 2012 isheavily backloaded and the 2914 forecasts are coming down. Generally speaking, the further out forecasts are, the more optimistic they tend to be and often come down, as time progresses. Yardeni has a very recent publication about the recent trends:
yardeni.com
My take is these forecasts are too high and bound to come down. To me, it looks the valuations are similar to 2007, with significant (although different) risk now.
The risk of today are Europe thetering at the edge of a recession, China slowing down and unforeseen consequences of central bank intervention to manipulate interest rates, exchange rates etc.
Enough macro. i am having trouble to find bargin stocks. 1999 dor that matter was very different, the bubble was in tech and internet stocks, while value stocks like BRK were making new lows. This time, tech stocks are relative bargains. |
