Doesn't anyone remember 2000?

[MKTrader]

Valuatons are better, relatively speaking. However, P/Es are still slightly above long-term averages. They touched their average briefly on Tuesday. It's certainly possible--and expected--that P/E should swing the other way (revert pass the mean) for a bit. It hasn't happened in two decades, but it surely could happen.

Quote from startraitor:

It did not last that long, look at charts and valuations. Contested elections and valuations was the straw. Valuations not a problem this time. And the dollar was crushing then....

 

[dbs119]

I remember 2000. That's when I became very short-term oriented after 2 years of being intermediate term trader enjoying a perma bull. After the bull of 2003 began though i started becoming more and more accustomed to being longer term investor ( i am still holding some positions accumulated in 2004 which is amazing for me). Now i started my own blog focusing on dividend stocks, which outperformed the market during the 2000-2002 downturn. You can view my current picks here:
http://dividendgrowth.blogspot.com/2008/01/my-current-watchlist.html
Oh yeah, and if the tuesday low is not violated, then we might avoid the next 2000

 

[scriabinop23]

Quote from MKTrader:

Valuatons are better, relatively speaking. However, P/Es are still slightly above long-term averages. They touched their average briefly on Tuesday. It's certainly possible--and expected--that P/E should swing the other way (revert pass the mean) for a bit. It hasn't happened in two decades, but it surely could happen.

Inflation outlook, more precisely bond yields, determine acceptable PE. There's not much downside unless bonds go to 10%+ yields...

Here's the whole analysis I did a week ago...
http://scriabinop23.blogspot.com/2008/01/obligatory-armchair-s-valuation.html

 

[MKTrader]

Thanks. That's an interesting take on PE and valuations. There are others, though.

http://www.hussmanfunds.com/html/barrons.htm

http://www.hussmanfunds.com/wmc/wmc080121.htm

Quote from scriabinop23:

Inflation outlook, more precisely bond yields, determine acceptable PE. There's not much downside unless bonds go to 10%+ yields...

Here's the whole analysis I did a week ago...
http://scriabinop23.blogspot.com/2008/01/obligatory-armchair-s-valuation.html

 

[scriabinop23]

yea hussman is a pretty sharp guy ... i need to finish my work of showing historic PEs normalized to fixed income yield.
It definitely smooths out the price history.

 

[tradingbug]

I like this take on P/E ratios.

http://www.zealllc.com/2005/longwave2.htm

 

[scriabinop23]

Quote from tradingbug:

I like this take on P/E ratios.

http://www.zealllc.com/2005/longwave2.htm

Will have a look. But just did this last night to followup on the conversation. 10 year yield and S&P correlation:

http://scriabinop23.blogspot.com/2008/01/s-relative-value-to-10-year-note.html

Followed up by 90 day T-Bills vs Fed Funds #s:

http://scriabinop23.blogspot.com/2008/01/t-bill-versus-fed-funds.html

You can see how they somewhat correlate, as well.

 

[scriabinop23]

 

[athlonmank8]

Quote from athlonmank8:

Oh wait, few of you guys were around during that period. You only got the perma -bull half. Now it's time for the real fun. Losing. It's time for the longs to grab some popcorn because now the market's going to teach you how to REALLY invest.

Now let me update you on what happened.

Prices decline over the summer. Everyone wondered what the hell happened and no big deal.

Then WACK. We got nailed. Just like today.

The same scenario is playing out EXACTLY like 2000. Those of you who were around and were in techs remember it well.

Those of you who are long and simply too dumb to sell....will learn the hard way.

Remember, investing comes with experience. It now begins.

2008 the new 2000......

Hopefully everyone's taking notes.

I've got 3 IRA's pulled now 2 near the top and 1 the day the fed cut. Guys are calling me wondering when to get back in lol....

Told them to take a 2 year nap.

 

[Landis82]

Quote from athlonmank8:

Oh wait, few of you guys were around during that period. You only got the perma -bull half. Now it's time for the real fun. Losing. It's time for the longs to grab some popcorn because now the market's going to teach you how to REALLY invest.

Now let me update you on what happened.

Prices decline over the summer. Everyone wondered what the hell happened and no big deal.

Then WACK. We got nailed. Just like today.

The same scenario is playing out EXACTLY like 2000. Those of you who were around and were in techs remember it well.

Those of you who are long and simply too dumb to sell....will learn the hard way.

Remember, investing comes with experience. It now begins.

And what experience do you have?
You were around in 2000?
Don't make me laugh.

Try 1981-1982

or

Maybe even 1973-1974

Then get back to us, Mr. Voice of experience!