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Monday links: the new bear market
Abnormal Returns —
... “The farther stocks fall, the cheaper they get–and the higher the expected long-term return becomes. Unfortunately, that doesn’t mean we don’t have a long way to go on the downside.” (Clusterstock) ...
How Low Can the Market Go?
Yahoo! Finance: Tech Ticker —
... , March 2, 2009: [image] There were four massive stock bubbles in the 20th Century: 1901, 1929, 1966, and 2000. During each of these bubble peaks, the S 500 neared or exceeded 25X on professor Robert Shiller's cyclically adjusted P/E ratio.* After the first three of these peaks, the S 500 PE did not bottom until it hit 5X-8X. We're still in the middle of the last one. The most recent bubble peak, 2000, was by far the most extreme we have ever experienced. In 2000, the S 500 by prof. Shiller's measure exceeded 40X (it had never before exceeded 30X). With the S 5000 ...
Dow 5000, Revisited
Yahoo! Finance: Tech Ticker —
... about the possibility of the DOW dropping to 5,000 and the S 500 to 400-500. This is actually good news. The more negative everyone gets, the more likely we're getting close to a bottom. (Unfortunately, few strategists are actually predicting the market will hit this level yet. But at least they're talking about it.) The bad news is that 400-500 on the S would still be higher than previous major bear market lows on a price-earnings basis (See Robert Shiller's chart above and " How Low Can The Market Go?" ). Fortunately, it's not that much higher. I ...
Dow 5000, Revisited
Yahoo! Finance: Tech Ticker —
... about the possibility of the DOW dropping to 5,000 and the S 500 to 400-500. This is actually good news. The more negative everyone gets, the more likely we're getting close to a bottom. (Unfortunately, few strategists are actually predicting the market will hit this level yet. But at least they're talking about it.) The bad news is that 400-500 on the S would still be higher than previous major bear market lows on a price-earnings basis (See Robert Shiller's chart above and " How Low Can The Market Go?" ). Fortunately, it's not that much higher. ...
Grantham: You Should Buy Now Even Though Market Could Tank
Yahoo! Finance: Tech Ticker —
... about overruns?” On the other hand, if you invest too little after talking about handsome potential returns and the market rallies, you deserve to be shot. Jeremy's full argument below. Interestingly, he has again revised his "fair value" estimate for the S 500 down, this time to 900--which is still 20% above where the market is now. Before the market collapsed, Jeremy put fair value at 975. Let's hope that trend doesn't continue. See Also from The Business Insider : How Low Can The Market Go? Stocks Now Distinctly Cheap
Enjoy the Sucker's Rally, Says Merrill's Rosenberg
Yahoo! Finance: Tech Ticker —
... with the benefit of 20-20 hindsight, it is obvious that the move fell short of reversing the overall deflationary trend in the Japanese economy or the secular bear market in equities. For longterm investors who take a real business cycle view, this may be an important anecdote to consider as the Fed moves down the same path Japan did. In other words, we still prefer bonds to cash and stocks. See also from The Business Insider : Rogoff: Worst Over? Are You Kidding? How Low Can The Market Go?
