re: I get DJIA min of 12,000 before 24 months expire..... of course, he is staying "conservative' with DJIA 9500)
Kirk: DJIA of 12000 sure would be something to see! I think you may be a little optimistic, using BB's figures for mid-term elections. As you know, BB indicated that over the past several mid-term elections, the subsequent "rebounds" in the market ranged from 20% to 92% over a period of 6 to 39 months. Thus, using the most conservative of BB's figures, we could see only 20% from the lows of 7539, which give a market high of about 9100.
What's missing from all this discussion is the P/E ratio, which seems to be the ultimate governor on this market--we only had a brief flirtation with a P/E of 25 on the DJIA, and quickly left that lofty territory. Supposing we see a P/E of 25 again, we would need earnings of about $60 on the SP500 to reach the 12000 DJIA level. This $60 earnings figure would be a 20+% increase over the current estimate of $49. So...the question is, do you think earnings will increase over 20% in the next two years? AND, do you think the raging optimism that lead to the P/E of 25 will repeat at the same time?
I will agree with you, Kirk, on BB's optimism during yesterdays show. He seemed to be bubbling with enthusiasm over this market. And, as he noted after the call from the woman (from Palo Alto, I believe) who had been bearish since DJIA 5400, he was too kind in not asking her "where has she been during this market??" ;-)
Regards...Bill S |
