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13-02-2009, 09:23 AM
#181
Hoop the statistics might not show it yet, but this is a "world recession".
how much worse does it have to be, to not be a world recession.
Sure perhaps Peru might not be, but i'm sure you get my drift.
Roubini, Marc Faber and Nicolas Taleb, forget Peter Schiff (he is a negative doomsday man).
THese guys cut the crap and know what they are talking about.
Most are calling for a U shaped slow recovery beginning in 2010. Based on that when would the next bull begin... who knows.
Question i have,
Does the market bottom at the inflection point where the bad news stops getting worse and there is less bad news?
Or does the market bottom only once there is good news?
Both of the above are likely to be well before a statisical recovery in employment and GDP stats.
Last edited by Footsie; 13-02-2009 at 09:45 AM.
“If you're worried about falling off the bike, you’d never get on.”
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13-02-2009, 11:20 AM
#182
Originally Posted by Footsie
......Question i have,
Does the market bottom at the inflection point where the bad news stops getting worse and there is less bad news?
Or does the market bottom only once there is good news?
Both of the above are likely to be well before a statisical recovery in employment and GDP stats.
Yeah I agree that the statistics inform us of the better times much after the recovery has already begun.
Researchers agree that Equity Markets recover much earlier, usually during the worst last half of a recession.
Taking all the recessions and the equity bear markets into consideration throughout history, researcher have found that Equity markets recovery commences on average 58% through a recession...so the rule of thumb is, expect a recovery to begin halfway through a recession.
I have mentioned this in my #177 and #185 posts as an bottoming indicator. The tricky part of course is defining where a recession halfway point is when an Equity market bottom has not yet been confirmed.
Dow noticed that at the mature end of a bear market cycle ...the market becomes immune to the continuing bad news.... I think we are at this point or nearly there.
Footsie quote...."...Most are calling for a U shaped slow recovery beginning in 2010. Based on that when would the next bull begin... who knows...."
Interesting comment that most seem to be more negative now and very positive in 2010.
I'm a little bit positive now and negative later in that I am expecting a slight upwards curvy L-shaped recovery or a "reversed J - shaped" with one or two retesting of the bottom. Remember many markets have entered into a secular bear cycle. The USA has been in one now for 8 years so an U-shaped recovery is the absolute best scenario you can ever have during a secular bear market cycle (supercycle). You'll never get a J-shaped recovery in a secular bear market cycle (supercycle).
Last edited by Hoop; 13-02-2009 at 11:22 AM.
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18-02-2009, 01:33 PM
#183
hoop
I have been running similar sets of indicators to you (based on Russell Napier;s book) and not one has triggered yet.
I believe that whilst this bear remains alive there is a chance of the dow going to 5,000
at 5,000 you have a Q ratio of 0.30x
“If you're worried about falling off the bike, you’d never get on.”
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18-02-2009, 07:08 PM
#184
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19-02-2009, 10:05 AM
#185
Originally Posted by Stranger_Danger
Footsie. I take your point and know of no sector that is "creaming it".............
Check out Delegat's half year annoucement
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19-02-2009, 04:46 PM
#186
I wrote a massive reply then got "timed out" and lost the lot.
http://advisor.morningstar.com/artic...asp?docId=3903
refer to this article.
the best time to buy equities was when the p/e was less tan 10x but we can't all wait decades.
You just have to use your judgement.
Re the best time to buy
I dont want to make predictions
I have a view, but it's flexible as nothing is certain.
Hope for the best, prepare for the worst - should be the motto of bear markets
PS re my indicators - they match Russell Napier's top half dozen.
“If you're worried about falling off the bike, you’d never get on.”
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04-03-2009, 12:18 PM
#187
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04-03-2009, 01:18 PM
#188
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04-03-2009, 02:06 PM
#189
GRR it happened to me again
timed out and missed my whole post
here is the gist
My target to the downside for the Sp500 is 500
There were four massive stock bubbles in the 20th Century: 1901, 1929, 1966, and 2000. During each of these bubble peaks, the S&P 500 neared or exceeded 25X on professor Robert Shiller's cyclically adjusted P/E ratio. After the first three of these peaks, the S&P 500 PE did not bottom until it hit 5X-8X. We're still in the middle of the last one.
Based on Professor Shiller's latest numbers, we're at about a 12X P/E. (Prof. Shiller's last update was at 805 on the S&P 500, which produced a 14X P/E. Plugging in today's 700 on the same earnings number, we get about a 12X P/E). The 12X PE compares favorably to the long-term arithmetic average of 16X, but it's still way above the historical troughs of 5X-8X.
Using Professor Shiller's latest earnings data, here's where the numbers would fall out if the market just kept dropping and 10-year average earnings didn't grow from today's level:
P/E S&P 500 Level
10X 575
8X 460 (highest previous trough low)
7X 400 (average previous trough low)
6X 350
5X 300 (lowest previous trough low)
“If you're worried about falling off the bike, you’d never get on.”
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07-03-2009, 03:39 PM
#190
Historic PE cycles (US/global)
I find this analysis very interesting.
Based on this, the question is :
will this particular trough go real low, like the all-time low (because this crunch is just so "global" compared to past ones, because of the internet etc),
or will it not be not so bad because of all the frantic (and "informed?") machinations of goverments.
One thought is to have a look at interest rates at each of those cycles, to see if there is a relationship to the PEs.
Not sure if i know where to look. US Bond rates?
(ie can't consider some sort of average global interest rate because this a nonsense what with differing soverign risks). We are comparing with US not global stock market anyway?
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