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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (39697)	10/16/2010 4:43:23 AM
From: Madharry	1 Recommendation Respond to of 78747

I would also point out that Hussman doesnt analyze the makeup of the spy500 which is currently technology 22%, financials 15% vs only 3+% of utilities. the financials have experienced severe cutbacks in dividends, and dividends in technology have always been small. Energy which has been a good payer of dividends is currently only 11% of the spy500. See sectorspdr.com for more details.

To: Spekulatius who wrote (39697)	10/18/2010 12:44:41 AM
From: Jurgis Bekepuris	Respond to of 78747

I agree with your points regarding issues with Hussman's analysis. He tries to address some of your critique with the second graph using Shiller PE. He does not really address the comparison to bond yields. I disagree with you about the "market looks fairly valued and perhaps overvalued". There are tons of high-brand-value megacaps that are still trading close to the lowest valuations in terms of P/S and P/E in a decade (of course, some of them traded at even lower valuations on 3/2009, but we are not talking about panic bottoms). Unless economy collapses again, companies like JNJ, MSFT, PG, IBM, etc. are not overvalued and they comprise a large part of the market-cap weighed indices. They are not fantastically cheap, but they are somewhat cheap and closest-to-the-cheap-in-ages.