So what is the depth of the bubble?
- Thread starter rowenwood
- Start date
Are you guys kidding me?
After what has just happened to the sell-side analyst community, along with Elliott Spitzer breathing down everyone's neck, not too mention Sarbanes-Oxley how could anyone think that publicly traded companies and their CEO's would be signing-off on aggressive accounting practices? If anything, CEO's are "low-balling" conference calls and sandbagging their guidance.
Get Real.
After what has just happened to the sell-side analyst community, along with Elliott Spitzer breathing down everyone's neck, not too mention Sarbanes-Oxley how could anyone think that publicly traded companies and their CEO's would be signing-off on aggressive accounting practices? If anything, CEO's are "low-balling" conference calls and sandbagging their guidance.
Get Real.
Oh I forgot my model says that the distribution has begun 
Quote from harrytrader:
We are at 19.67 http://www.djindexes.com/jsp/avgStatistics.jsp
Remember also that the pilar of Finance is discounted Cash Flow. The fair value of an asset today is discounting the value of the asset not in 1 year but theorically in infinite number of years in the future in practice in at least ten years. So the so called "consensus" reflects this future not the present that is to say the present fair value is normally LOWER than the future value. So the P/E of the supposed fair value of DJI should be lower than what the consensus expect, historically it is rather 12 to 15. So we are overvalued already fondamentally. This fundamental value could be considered as a STATIC evaluation whereas the DYNAMIC evaluation follows a path that is quite different on relative short term basis (ie my model equations).
There is a bubble in the S&P 500 or the Dow Jones Industrials. In fact, the median P/E for the S&P 500 based on consensus estimates from the folks at my Grandma's retirement home for the next 12 months is 30, for the Dow Jones it is 28.6 times earnings, and 100 times earnings for the Nasdaq.
This compares to the long-run average P/E ratio of 14, which suggests that the DJIA and S&P are twice where they should be for a "normal" PE.
Furthermore, bear markets do not end at such lofty valuations. In fact they usually end with single-digit P/Es. This suggests that the DJIA and S&P have more than the 50% to fall, and could fall as much as 75% from here.
This compares to the long-run average P/E ratio of 14, which suggests that the DJIA and S&P are twice where they should be for a "normal" PE.
Furthermore, bear markets do not end at such lofty valuations. In fact they usually end with single-digit P/Es. This suggests that the DJIA and S&P have more than the 50% to fall, and could fall as much as 75% from here.
I suppose the depth of the bubble is determined by the biggest players?
And maybe the consensus or average opinion of the biggest player's about the depth of the bubble is the most accurate determination of what the depth of the bubble is because they call the shots?
So what does Merril, Buffet, B of A and the other top players think?
The bubble is an opinion formed by the top elite, and this opinion isn't disimilar to the other market opinions?
Few companies aren't infalted (PE).
And maybe the consensus or average opinion of the biggest player's about the depth of the bubble is the most accurate determination of what the depth of the bubble is because they call the shots?
So what does Merril, Buffet, B of A and the other top players think?
The bubble is an opinion formed by the top elite, and this opinion isn't disimilar to the other market opinions?
Few companies aren't infalted (PE).