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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: mishedlo who wrote (92463)1/10/2009 12:04:13 PM
From: SouthFloridaGuy1 Recommendation  Read Replies (1) of 116555
 
Mish, I don't think the stock market is a legitimate barometer of Depression. Year over Year stock prices are not necessarily reflective of economic conditions, though they may be indicative of relative economic conditions.

The stock market bottomed in 1933 and went up several hundred percent until 1937, but I doubt anyone would classify that period as a boom.

Likewise in the early 80's, stocks essentially stopped going down especially in relation to the severity of economic conditions. Stocks at low double digit P/E's and depressed margins have always been a winning investment. Likewise, above trend P/E's and bloated margins (2007), a sure fire crap-out.

Future stock prices have always been determined by valuations/profit margins/earnings prospects.

If something is bought cheap enough and the transaction makes sense on an unlevered basis, it's most likely a good investment irrespective of almost any economic condition...
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