General market lab and commentary Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : General market lab and commentary

SPY 683.38

+0.1%

Nov 12 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Robohogs who wrote (337)	4/19/2016 11:39:45 AM
From: The Ox	of 668

I figured you could use some positive feedback and a thank you for taking the time to share the many issues in your post. A lot to consider. An obvious issue (to me), is that you are saying the bear market is finished and we are at the cusp of a new bull period (or was this simply to use as the premise for the arguments you put forth)? I think we are likely at that point in time but I believe the majority of people out there do not think that is the script we will follow going forward. I think your basic concepts on PEs and long term trends in that area are spot on. So many variables are currently "questionable". It will be down the road and with hindsight that we'll know which of those variables were "pointing" in the right direction and which were lagging indicators. PEs are balancing earnings with future growth expectations. Lower multiples imply a negative view on the future and/or superior current earnings environment versus lower growth rates ahead. A few % rise in the total market PE would translate into a substantial rise in the indexes if we assume that the rise is due to improving earnings power vs. declining actual earnings. These valuation concepts are always being questioned. It's important to "see both sides" but our investment decisions must be based on which side we think has the proper view of the future. I'm still on the side of cautiously bullish, especially since we've (essentially) gone sideways for a number of years. The base is built for the next move and we're still in the "grey area" where the next move for the markets is in play. We could see these markets break out, continue to chop and base or roll over substantially. I think we'll see the break out over the next several weeks but since we're in the grey area, I'm less inclined to be aggressive with my investment stance. If we start to see the below concept playing out in reality, then I'll get more aggressively bullish. So over the next 6 months, shifting the forward earnings ahead 1/2 year and lapping the lows in this earnings recession could easily pick up 5-10% growth. SO PEs probably need very modest growth, but the bulk of the work will come from growth.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next