Cheap Valuations? Maybe Not Even Close Vis-à-Vis Future Earnings

Quote from gnome:

I've been using $56 from an SP spreadsheet. That number is a bit old... the most recent number I can find currently (Oct 29, 2008) is "$48.52, 12-month as reported earnings"... With the SP @ 873, that's still 18x earnings.

So, if earnings drop further... and the P/E multiple declines into the "value range" of "10x or less", the market is going much, MUCH lower.
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Yes, spx headed four 575.
 
Quote from snowhite:

Yes, spx headed four 575.
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If - IF - this is the mother of all recessions it's been bandied to be - it needs to fall to ~350 to match both the earnings decline and the PE multiple of the previous two worst recessions.

That happens to be near the '87 high and represents the wiping out of 20+ years of market gains - damn sobering thought, that.
 
Don't start an intelligent discourse on me now, guys.

I love it when someone gives me the opportunity to post their thoughts, it sparks a debate, and it causes me to challenge some of my most deeply held biases.

It makes me more prepared, no matter what may lurk ahead.
 
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