tag:blogger.com,1999:blog-22646804.post114903969700570662..comments2023-10-05T08:54:28.868-07:00Comments on Confused Capitalist: Tall Trees can't grow to the sky ...Jay Walkerhttp://www.blogger.com/profile/09864804379266346012noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-22646804.post-1149297267207256722006-06-02T18:14:00.000-07:002006-06-02T18:14:00.000-07:00I still remember the NIKKEI at 38000, went down to...I still remember the NIKKEI at 38000, went down to 7500 over a 7 year period and today it’s at 16000.<BR/><BR/>All humble pie bets are off. I still think were safe through the first half of 2007. After that it’s anyone’s guess.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-22646804.post-1149185123623294562006-06-01T11:05:00.000-07:002006-06-01T11:05:00.000-07:00Thanks for dropping by;for a little context relati...Thanks for dropping by;<BR/><BR/>for a little context relating to my comments of "historical" highs. I'll refer you here:<BR/><BR/>http://bigpicture.typepad.com/<BR/>comments/2006/05/will_cheap_stoc.html<BR/><BR/>and here ...<BR/><BR/>http://hussmanfunds.com/wmc/wmc060522.htm<BR/><BR/>and here ...<BR/><BR/>http://bigpicture.typepad.com/.shared/image.html?/<BR/>photos/uncategorized/spxbndyld_1.png<BR/><BR/><BR/>and most particularly this ...<BR/><BR/>http://bigpicture.typepad.com/<BR/>comments/2006/05/what_will_the_s.html<BR/><BR/>Let's check back in a year or so; if the S&P didn't drop at least 20% from it's recent high somewhere in that time frame, I'll eat some humble pie.<BR/><BR/>In the interim, I advise caution and using some hedging techniques to reduce overall risk. Selling some junk out of your portfolio never hurts either..<BR/><BR/>JWJay Walkerhttps://www.blogger.com/profile/09864804379266346012noreply@blogger.comtag:blogger.com,1999:blog-22646804.post-1149158448355802342006-06-01T03:40:00.000-07:002006-06-01T03:40:00.000-07:00We are all tired of hearing that this time around ...We are all tired of hearing that this time around it is going to be different. The antagonists claim that the stock market will not endure a prolonged bear market dwindle being that corporate America is sitting on a pile of cash and when the time is right the bottom support will come from share buy back programs thus sustaining values. I don’t think that will happen.<BR/><BR/>Having said that, I would humbly submit that we are not in the throws of a bear market. In order to qualify for being in a bear market multiples such as PE have to come down substantially over a broad spectrum. This is not the case. You stated that “when PEs are above historical norms…”. PE ratios are not above historical norms today. In fact some sectors are below their historical norms. For the past 3 year we have witnessed double digit growth both in revenue and profits. Some stock valuations have kept pace with these desirable increments and others have not.<BR/><BR/>Take for instance GE. According to its historical PE the stock should be trading around $39.00 per share. It is trading in the $33.50-$35.00 range. This is a full 10% below the levels needed to trigger a bear market. If GE manages to grow its bottom line by 8% in 2006 this would translate to $36.20-$37.80 while retaining the 10% cushion of being below its historical PE multiple.<BR/><BR/>Disclosure: This comment was written by a CrossProfit advisor and may not be the opinion of CrossProfit.com. http://www.crossprofit.comCrossProfithttps://www.blogger.com/profile/03418982217264443781noreply@blogger.com