Hi James,..Re: Very overvalued by any historic standard..
Maybe the problem is that they are calculated according to historic standards. However, there hasn't been a comparable time in history where inflation borders on 1.4% and long rates are at 5.34%. According to Abby Cohen, stocks are relatively undervalued since the sell-off commenced on July 22nd. Now either she knows something we don't or historical standards must have been altered?
Earnings estimates for next quarter were lowered by analysts who are trying to CYA and keep their jobs; however, if you look at selected issues last quarter such as MYG, Dell, CSCO, Gucci, GIC and others, they actually beat estimates handily. So now we focus on those who didn't, like HWP, CPQ, MMM, and these blamed either a strong dollar or SE Asia, yet they competed in the same markets as some of the ones who beat estimates. Now what does this mean? Do all S&P issues get lowered estimates based on the few? Must be easier to handle things that way.
Just observing the strange spin on earnings.
Lee |
