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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: mishedlo who wrote (92446)1/9/2009 12:18:14 AM
From: Little Joe2 Recommendations  Read Replies (2) of 116555
 
Mish:

It is worse than that because not only will we have less earnings but the pe typically drops dramatically in deep recessions. Of course I think we are headed for a deep depression. I remember in the 70's when my broker was recommending to me to buy stocks in good companies with solid earnings at 3x earnings and he made the compelling argument "how much lower can it go". I found out. 1x earnings.

The market will not sustain a normal multiple in times of serious economic distress.

LJ
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