The buzz is for $74 in earnings in 2010, justifying whatever.
Why is no one talking about the S&P500 P/E ratio?
- Thread starter MrDODGE
- Start date
There's a big discrepancy between "operating" and "as reported" earnings.
You have to consider that any expectation of wage inflation must be severely tempered because of the globalization of the economy.
We will not likely see wage-push inflation, or even wages as a contributing element inflation, in the U.S., in our lifetimes - not in an era of overcapacity, exponentially growing productivity, and competition from the likes of Mexico, China, Thailand, Indonesia, etc.
We'll never see the 1970s, 1980s, or union strength in the U.S. again.
Here's the double-edged sword: If the middle class in the U.S. continues to shrink, and China and other large nations continue on their business model of cheap production (they have to because of demographics)...
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Quote from Sky123987:
not try to say you are wrong, i'm just kinda curious. I looked at little on yahoo and it seems like operating income is larger than reported earnings
Right. "Operating Earnings" = "Earnings before bad stuff".... phoney baloney.... massaged and gimmicked.
It's sort of like CPI... where increases in the price of oil are left out because they want it to look like costs/inflation are lower than they really are.
Sometimes earnings matter, sometimes not... as with many things in the market.
BTW... I've read where As Reported Earnings for the 3rd quarter might actually be NEGATIVE, 12 months trailing. Wouldn't THAT be something... The P/E would officially be "irrational". (Even if they come in at $.50, we could see a PE of 2000x+. That would be historic.)
I am a bit befuddled by this as well when I checked a few of the blue chip stocks. I wonder if the change of the "mark to market" rules has anything to do with this insane PE level. Which sectors are impacting this PE level the most?
acepowerdrive
Guest
p/e has been flat since march
this is a dead cat bounce... earnings are not increasing but rather stop decreasing for a while.
than earnings will become no earnings and you get the story so p/e do change.
one bad qaurter or one bad mistake by a company and risk chapter 11 like the banks... i mean subprime mess almost bankrupt all the banks if FED didn't bail them out.
isn't anyone shocked that citigroup is 35% owned by the GOVT
and biggest US mortgage company is bailed out by the gov't
and that the FED sets the price of homes, stocks, etc. and even price of oil.....like do we need the gov't to set prices or let free market forces determine prices...price of stocks are determined ultimately by earnings and risk of owning the stock.
i have a problem saying housing prices and oil prices and stock prices are stabilizing....what does the gov't know what price should be....supply and demand ultimately determines price...
higher prices less demand...economics 101
if housing prices or stocks become too high less demand thus the crash...same as oil.....same as anything it's as simple concept in economics 101...
this is a dead cat bounce... earnings are not increasing but rather stop decreasing for a while.
than earnings will become no earnings and you get the story so p/e do change.
one bad qaurter or one bad mistake by a company and risk chapter 11 like the banks... i mean subprime mess almost bankrupt all the banks if FED didn't bail them out.
isn't anyone shocked that citigroup is 35% owned by the GOVT
and biggest US mortgage company is bailed out by the gov't
and that the FED sets the price of homes, stocks, etc. and even price of oil.....like do we need the gov't to set prices or let free market forces determine prices...price of stocks are determined ultimately by earnings and risk of owning the stock.
i have a problem saying housing prices and oil prices and stock prices are stabilizing....what does the gov't know what price should be....supply and demand ultimately determines price...
higher prices less demand...economics 101
if housing prices or stocks become too high less demand thus the crash...same as oil.....same as anything it's as simple concept in economics 101...
It's meaningless to look at these types of historical charts, because It Is Different This Time. Duhhh ...
But seriously, recently the aggregate S&P 500 posted Negative quarterly earnings (if I'm not mistaken), so everyone is just guessing where steady-state earnings are likely to reset.
This could be the catalyst for the next downturn: earnings misses.
But seriously, recently the aggregate S&P 500 posted Negative quarterly earnings (if I'm not mistaken), so everyone is just guessing where steady-state earnings are likely to reset.
This could be the catalyst for the next downturn: earnings misses.