That would definitely raise the P/E, but how do you know this isn't already priced in? (If it actually happens). Most people seem to have been bearish on earnings for a while now.
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With a PE of 14.22 on SPY - A Crash is Impossible
- Thread starter aeliodon
- Start date
That would definitely raise the P/E, but how do you know this isn't already priced in? (If it actually happens). Most people seem to have been bearish on earnings for a while now.
you'd think the market prices in bad news but on Friday, GM/Ford/Chrysler were put on credit watch negative and the market acted like this was big news and tanked 100 more points.
somewhere was posted that the banks have to report level 3 debt (the stuff that has no bid) with their 2Q 10Ks
should be interesting
somewhere was posted that the banks have to report level 3 debt (the stuff that has no bid) with their 2Q 10Ks
should be interesting
Quote from daddyeaux:
you'd think the market prices in bad news but on Friday, GM/Ford/Chrysler were put on credit watch negative and the market acted like this was big news and tanked 100 more points.
Ok good point, but I would have to think it would be dumb money exiting at that point; how could you not see that coming
Quote from aeliodon:
There is absolutely NO WAY this market will crash like RBC says it will.
Sure GM/F/Chrysler will all be bankrupt soon. But there's enough private equity, hedge fund, sovereign wealth funds to bail these companies out 100 times.
Sure all the financial will soon be trading at book value. But again there is enough PE/Hedge/Sovereign money out there to bail out the entire US financial system along with GM/F/Chrysler.
Sure we will correct 20% from the all time highs. Maybe even *gasp* 25% from the highs. But that is still one of the weakest bear markets in history.
There is no way we crash over 50% from the highs like the 1920s or 2000-2003.
The world is still awash in super cheap money. And the valuation correction that began in 2000 never really ended. We laying the foundation of a huge bull market. The absolute worst case senerio is a 5 year sideways grind.
did you know that if earnings drop then p/e's go up?
do some reading. super cheap money is temporary. have you heard of inflation?
'Impossible' is a word that doesn't exit in financial markets. Current PE and next year stock market performance are largely uncorrelated.Quote from aeliodon:
Sure we will correct 20% from the all time highs. Maybe even *gasp* 25% from the highs. But that is still one of the weakest bear markets in history.
There is no way we crash over 50% from the highs like the 1920s or 2000-2003.
I agree there will be a bull move down the road where huge fortunes will be made for those that don't get their head handed to them right now.
But if that is that 6 months away or 6 years I have no idea.