The Stock Market looks pretty weak...........again.........

jmski52

Looks like a precipitous drop happening again..............

Down 170pts, now down 160 pts..............

Down only 110 pts............there for a minute, it looked kinda rough..............a loss of 130 pts in one quick glance........................weird stuff.........

gecko109

<< <i>Looks like a precipitous drop happening again..............

Down 170pts, now down 160 pts..............

Down only 110 pts............there for a minute, it looked kinda rough..............a loss of 130 pts in one quick glance........................weird stuff......... >>





Not really "weird" at all when you consider its simply a shell game full of speculators. The stock market is no longer a place for long term investing....its simply the world's largest roulette wheel.

tincup

And when you take into account that it is a computer game also.... where trades are set to occur at certain trigger points, etc., and occur in microseconds..... expect some really wild rides that don't make any sense.

The stock market is no place for the weak hearted

MoneyCollector

Look at how many people make their living (and probably a very good living on average) off the market. The money has to come from somewhere, right? When the market is flat or declining, who is contributing all the money that these people "earn?"

And last week "they" figured out all theat is needed to send the market reeling is to hit a "b" instead of an "m" when executing an order. I'm sure there are already a bunch of programs set up to take advantage of the situation next time it "accidently" happens.

IMHO, no place for the little guys' life savings.

Randy

yellowkid

I know it can be hard to avoid, but watching that daily (as I do ) can drive you crazy. I would like to think that I am pretty well inurred to the markets gyrations, I started doing stocks in '87 when the first big crash came, stayed during the tech rise and fall, the 911 fall, and rise, and last last years fiasco, I think I am getting pretty accustomed to it. Stilll...........

MilesWaits

If it makes you feel any better, GS and JP made money this week....

roadrunner

When the market is flat or declining, who is contributing all the money that these people "earn?"

Right now it's us the taxpayers who are providing the cash to the banks (via FED free loans) so they can front run the market via flash trading.

Reuters is reporting that Waddell-Reed brokerage submitted a trade to Barclays to sell 75K S&P E-minis. Barclays dumped it all within 20 minutes and set off bells and whistles on every flash computer out there. Guess who pocketed the $1 TRILL that J6P lost?

Current action in the SM look like a continuing correction from last week. It could still get reignited for another run back towards 12,000 in 2010. I wouldn't count it out.

roadrunner

KUCH

I called the brokster today and sold 45% of the portfolio. Check is on the way and will fund next gold/silver purchase. Made a few trades and now hold stocks in only 4 ea Fortune 500 companies. I'm pretty much done with equities until Wall Street acts like Main Street.

One thing I know, I'll sleep just fine tonight, thank you very much.

renman95

Time to go back on Percocet.

ChrisRx

This is an absolutely AWESOME time to buy stocks. People are scared, Euro is crashing, blah blah, etc etc.

Remember: Buy low sell high!

Justacommeman

<Reuters is reporting that Waddell-Reed brokerage submitted a trade to Barclays to sell 75K S&P E-minis. Barclays dumped it all within 20 minutes and set off bells and whistles on every flash computer out there. Guess who pocketed the $1 TRILL that J6P lost?>

May 6 big seller in e-minis sparks drop?

dontippet

<< <i>This is an absolutely AWESOME time to buy stocks. People are scared, Euro is crashing, blah blah, etc etc.

Remember: Buy low sell high! >>



I absolutely agree. What happens when silver prices fall? Does everyone here go out and quickly sell. No, in fact, a lot of people here want silver to dive so they can buy more silver a lower price. But when the stock market goes down, it's the end of the world.

meluaufeet

<< <i>Remember: Buy low sell high! >>



or sell high, and buy low... whatever works...

I must admit though, I've been wondering if european stocks might experience a melt-up... especially german exporters.

7over8

so they finally found the sacrificial lamb?

cohodk

<< <i>When the market is flat or declining, who is contributing all the money that these people "earn?"

Right now it's us the taxpayers who are providing the cash to the banks (via FED free loans) so they can front run the market via flash trading.

Reuters is reporting that Waddell-Reed brokerage submitted a trade to Barclays to sell 75K S&P E-minis. Barclays dumped it all within 20 minutes and set off bells and whistles on every flash computer out there. Guess who pocketed the $1 TRILL that J6P lost?

Current action in the SM look like a continuing correction from last week. It could still get reignited for another run back towards 12,000 in 2010. I wouldn't count it out.

roadrunner >>




I actually prefer a declining market. Money is made more quickly. Everyone always thinks prices only go up. Inflation has been so engrained into our psyche that we dont even recognize it. IE, inflation in real estate or equities or gold, or wages is good, but inflation in gasoline or potato chips is bad.

If Wall Street stole $1 Trill from J6P during the decline, did J6P get it back when the market recovered all the losses in the next few days?

Have patience ChrisRx.

jmski52

For the stock-buying crowd, what are the current P/Es in assorted industries at this time, anyhow? Let's put things into perspective.

OPA

<< <i>Not really "weird" at all when you consider its simply a shell game full of speculators. The stock market is no longer a place for long term investing....its simply the world's largest roulette wheel. >>



If that's the case the PM market is not far behind in second place.

johnny9434

to much unstable stuff going around right now. im glad im out of th stock market

gecko109

<< <i>

<< <i>Not really "weird" at all when you consider its simply a shell game full of speculators. The stock market is no longer a place for long term investing....its simply the world's largest roulette wheel. >>



If that's the case the PM market is not far behind in second place. >>





Disagree. In the past 5,000 years, no stock has ever been directly linked to currency. Stocks have never been used for bartering in everyday commerce, and many stocks have gone to ZERO value at some point. PMs have been directly linked to currency for the majority of the past 5,000 years. They have almost always been used for barter in everyday commerce, and neither gold nor silver has ever experienced a "ZERO value" status. To compare the perceived value of stocks to the perceived value of PMs is a horrible, nonsensical comparrison.

cohodk

<< <i>For the stock-buying crowd, what are the current P/Es in assorted industries at this time, anyhow? Let's put things into perspective. >>



The earnings estimates for 2010 on the SP500 are about $75 so the PE on the SP500 is about 15x. Estimates for next year are about $85, so SP500 is trading at 13.4x next year.


PE ratios have very little value, I wont say "none", but very little. For example, in 2006 everyone was saying the home builders were cheap as they traded with single digit PE's. The stocks then declined 80%. Almost all the builders have doubled or more int he past years even while they have earned no money.

Another example are the oil related companies. They traded at single digit PE's in 2008, and the stocks declined 60-80%. PE's are much higher now and the stocks have doubled or more.

Much more reliable ratios are price to sales, price to tangible book value, price to cash flow. Earnings are heavily influenced by accounting loopholes, taxes and interest gains or expenses. PE's have very little analytical value.

jmski52

price to tangible book value, price to cash flow. Earnings are heavily influenced by accounting loopholes, taxes and interest gains or expenses. PE's have very little analytical value.

cohodk, historical p/e's are indeed worth knowing. It's part of, but certainly it is not 100% of a good analysis. You can't know where you should be unless you know where you've been. I would dispute your contention that price to sales is worth anything. Sales are worth tracking in their own right, but imputing a price/sales ratio doesn't tell me anything. Sales data can be all over the place for any number of reasons, depending on the industry, and like any piece of data it helps to know the why's and wherefore's of the data when you plug it into any analysis.

price to book and price to cash flow - yeah, I'll give you that. Accounting loopholes? What are they? It used to be that accounting rules were standardized and followed in order to allow financial analysts to calculate good numbers and to make good projections. That was then. Taxes, interest and expenses are all part of standardized accounting practices (or what used to be). They are (or were) part of the equation that went into the making of a financial statement.

I'm not sure how much of any of the above even applies anymore. The rules are no longer rules, and you ought to know that.

But, back to p/e ratios - they've historically been very good at telling you which way things should be headed. Your example of home builders is not a valid one, because that industry has been messed with for a long time and the dislocations and screwed-up finance in that industry are still rampant. Not a valid point.

I can't comment on the oil stocks because I don't know what specifics and timeframe you are referring to. If you took data from the top of the bubble when oil was at $145 and compare it to a normal market, then I would question that example as well. I don't know what the p/e's of the oil business have been. I can tell you that I made some money in COP during 2008, but I got out when it looked too rich.

Back in ancient times, I was taught that p/e's are different in different industries and that p/e comparisons are best made between stocks in the same industry. P/E comparisons can be made between industries as well, and that is when the point in a product life cycle becomes important, as the earnings curve changes when a product matures vs. when it is new. Same goes for whole industries. The p/e's in high tech companies are always higher than in an older and established industry, mainly by virtue of the predictability (or unpredictability) of the anticipated earnings stream.

Regards, jmski.

cohodk

Sales are much more important than earnings. If you dont have sales then you dont have earnings. I always consider sales over earnings.

I could have used any industry group to prove my point. Drugs, technology, healthcare, ect. PE's can often be high at tops, but PE are NM--not meaningful-- at bottoms.

Another case example. From 1973 to 1981 PE's never went over 11 and were often in single digits. Market didnt go anywhere. From 1994 to 2000, PE's averaged 25. The market went up 3-fold.

Consistantly looking to buy the lowest PE will consistantly result in the lowest stock market returns. This is a common mistake MANY people make and is why they dislike the stock market.

In ancient times, I was taught the same as you. I was also taught portfolio theory. That was a waste of tuition dollars.

jmski52

I was taught the same as you. I was also taught portfolio theory. That was a waste of tuition dollars.

Lol, it wasn't a waste of dollars. It was "an education". Learning sensitivity analysis is a good thing. Like I keep telling MoneyLA, 5% in gold to "hedge" against a decline in stocks ain't squat.

To be honest, I don't select stocks based on P/E ratios, and who's to say that the examples you gave weren't chicken vs. egg examples anyhow?

I use the Bob Dylan Theory of investing, "you don't need a weatherman to know which way the wind blows..............."

renman95

An ugly start and here we are near the close uo .97 on Dow(?)

RedHerring

DOW up 200 points off it's low this afternoon!

roadrunner

If Wall Street stole $1 Trill from J6P during the decline, did J6P get it back when the market recovered all the losses in the next few days?

Well, all the JoeSixPacks that were "smart" enough to have sell stops on their positions got cleaned out for good. Those that had their accounts with brokers or fund managers who also use sell stops got cleaned out as well. The Joe's that did nothing probably saw no real change. But no doubt a lot of smart traders, hedge funds, etc. who might have been sleeping got their clocks cleaned.

Many of the gold miners have terrible P/E ratios. Many don't even have earnings every quarter. And in slowly weeding through miner balance sheets over the past year it seems to me there is no rhyme or reason to the number of "one-time" hits that can wipe out a quarter's worth of earnings. And the miners run into these consistently. Look at GRZ (Gold Resource Corp.) which is mining in "politically friendly" Venezuela. As soon as Chavez came out with the word about possibly nationalizing resources the stock started to slowly fade. In the past few weeks it has tanked. It probalby doesn't matter what its P/E was or will be. The only thing that GAAP accounting, SarbOx, and FASB have brought to corporations are more GAPS and barriers to accurate accounting. The first time I had to prepare a plant/facility budget using EBITDA I felt it was just a scam, though the business manager and accountants were telling me a different story. It's EAITDA that really counts. I know what comes next though:

LATIDA ........layoffs after TIDA.

roadrunner

fishcooker

1) I have seen them report a market index P/E, but did not count all the companies with 0 or negative earnings.

2) As long as E's are fake, it will be tough for P/E to be useful. Everyone doesn't fake the same amount at the same time.

3) The best "value" plays I've seen, had P/E's well over 100.

bumanchu

I didn't follow the "b" for billion instead of "m" for million storyline too closely, but I do a little day trading here and there and I have never seen where one enters shares in words like one billion, one thousand, three hundred and fifty shares, etc.

I think that story was fabricated BS.

someone prove me wrong.......

rpw

I do not follow Richard Russell but he does have some history behind him. You usually do not get stuff like this from guys like him. It's interesting when one of them sees the light. I question his timing but in a longer time frame I agree completely with his sentiment.

Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By The End Of The Year

jmski52

I read Richard Russell during most of the '70s, '80s and '90s. He knows his stuff. And I agree with him on this one.

cohodk

<< <i> I was taught the same as you. I was also taught portfolio theory. That was a waste of tuition dollars.

Lol, it wasn't a waste of dollars. It was "an education". Learning sensitivity analysis is a good thing. Like I keep telling MoneyLA, 5% in gold to "hedge" against a decline in stocks ain't squat.

To be honest, I don't select stocks based on P/E ratios, and who's to say that the examples you gave weren't chicken vs. egg examples anyhow?

I use the Bob Dylan Theory of investing, "you don't need a weatherman to know which way the wind blows..............." >>




And you have now hit the main idea!!!! If you wait to see which way the wind blows, you have probably missed the chance to take advantage of the opportunity.