Warning! Sell Stocks Now!

Off Topic Politics & World Issues
81

[quote]Headhunter wrote:

[quote]JoeGood wrote:

[quote]Headhunter wrote:

[quote]thunderbolt23 wrote:
Yes, please sell now. Because I am buying - and I’d appreciate the downward pressure helping me get (more) good deals.[/quote]

I know you guys are trolling me, which is fine. Been there, done that.

So, TB, which stocks are you buying? Since the market is overvalued by at least 40% and dividend yield is at just about a 100 year low and the PE is 15 (mostly derived from financials and TARP money) which is twice the typical bear market bottom (see first chart), I’m curious as to what stocks can overcome all those things. Let us in on what you’ve bought!

Be a true pimp.

[/quote]

Okay I’ll play, personally I wouldn’t buy until we see a dip below 875 on the S&P but if I had to buy I’d buy Dupont/ Monsanto take your pick, Nucor, CPL, Joy Global, FCX, ABB or RIo and I’d make a 20% insurance investment in GLD as insurance.[/quote]

Wall Street Journal…"1. The market is already expensive. Stocks are about 20 times cyclically adjusted earnings, according to data compiled by Yale University economics professor Robert Shiller. That’s well above average, which, historically, has been about 16. This ratio has been a powerful predictor of long-term returns. Valuation is by far the most important issue for investors. If you’re getting paid well to take risks, they may make sense. But what if you’re not?

Uh, oh, TB will call it a conspiracy website…[/quote]

I think that PE’s are inversely correlated with future returns, but, on a year-to-year basis, any impact is mostly drowned out by random influences.

And Robert Shiller is a Keynesian. In his last book he griped that the stimulus was far too insignificant. If I recall some of your past posts, Keynesians are the devil - so why are you taking him seriously?

82

[quote]Headhunter wrote:
Buying stocks now in general means a PE of 20 and a div yld of 2%. Those numbers are insanely bad for most investors. History says you’re a sucker if you do this.

Graphs don’t lie, gents. Put aside ego and face reality.[/quote]

This is why only a sucker buys the market. Its like deciding to get married and then saying “Oh any redhead will do”

83

[quote]milktruck wrote:

[quote]SkyzykS wrote:

[quote]jsbrook wrote:

Right.[/quote]

Yeah, I hope so. I look at companies like C as very interesting at this point. If a person buys that right now, and they return to even half of their previous price, you would be looking at about 8x on growth, and 50-75% yield of dividends per year compared to the cost basis.

Of course that is predicated on a return to previous performance, which is not garaunteed, but fuck it, it’s worth a shot.
[/quote]

I thought it was very interesting from a behavioral finance perspective that C bounced so hard and so much on the $1 level, the price of a lottery ticket.[/quote]

I bought a far bit of C between $1-2 because I was certain that while things might be bad, that C was not going to vanish and even if it had to sell off assets to survive that teh valuations were too low. I still believe that, though I think it might be a VERY long time before it hits even half its previous valuations.

84

[quote]JoeGood wrote:

[quote]Headhunter wrote:
Buying stocks now in general means a PE of 20 and a div yld of 2%. Those numbers are insanely bad for most investors. History says you’re a sucker if you do this.

Graphs don’t lie, gents. Put aside ego and face reality.[/quote]

This is why only a sucker buys the market. Its like deciding to get married and then saying “Oh any redhead will do”[/quote]

I am kind of like that with Colombian girls, though.