tag:blogger.com,1999:blog-6616959642391988608.post2357816191678865904..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Equities are still cheapScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger13125tag:blogger.com,1999:blog-6616959642391988608.post-379745486262047142012-03-08T09:09:58.609-08:002012-03-08T09:09:58.609-08:00Re corporate profits vs GDP: I don't think it ...Re corporate profits vs GDP: I don't think it matters much where the profits come from. A stronger global economy is good for the U.S., isn't it? The more they produce, the more they can buy from us. <br /><br />And I think you could argue that since an increasing share of the profits of U.S. based corporations is coming from their overseas operation, the record-high level of profits to Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-78800502085182172182012-03-08T08:57:56.816-08:002012-03-08T08:57:56.816-08:00I've noticed many bloggers using your now famo...I've noticed many bloggers using your now famous "corporate profit divided by GDP" chart to measure US corporate profit margins.<br /><br />Quick question -- is this metric still applicable in the last decade where US corporate profits are increasing coming from foreign markets? <br /><br />In other words, if US corporations are serving global customers, then shouldn't be WimpyInvestorhttps://www.blogger.com/profile/18148362644880449393noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-55488979663866224532012-03-03T21:19:25.022-08:002012-03-03T21:19:25.022-08:00"Message: nobody trusts these profits to last...<i>"Message: nobody trusts these profits to last; at the very least the market is priced to a huge mean-reversion in profits."</i><br /><br />I agree that investors believe profit margins are very high, no doubt about that. I am one of them. Having said that, how do you figure that the market is priced for a huge mean revision? How does one know what the market is priced for?<br /><br /Tihohttps://www.blogger.com/profile/10336666083094327126noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-64879079807933839582012-03-02T19:17:44.011-08:002012-03-02T19:17:44.011-08:00The Q Ratio, still indicates the markets are over ...The Q Ratio, still indicates the markets are over valued...<br /><br />http://www.businessinsider.com/the-stock-market-is-still-33-to-44-overvalued-2012-3<br /><br />I am not a rowbot!Hanshttps://www.blogger.com/profile/05183141792723754273noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-61620667395358734952012-03-02T06:46:01.387-08:002012-03-02T06:46:01.387-08:00This is a beautiful plot of secular bull and bear ...This is a beautiful plot of secular bull and bear markets. The single best visualization I have seen of secular bull and bear markets is from <a href="http://www.crestmontresearch.com/docs/Stock-Matrix-Tax-Exempt-Real3-11x17.pdf" rel="nofollow">Crestmont Research</a>. They have a great stock market matrix from 1900 to 2011 color coded by time periods with inflation adjusted data. This plot Junkyard_hawg1985https://www.blogger.com/profile/18114117558513498514noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-7796233686657047402012-03-02T05:59:50.554-08:002012-03-02T05:59:50.554-08:00Bonds, including junk bonds, traded lower communic...Bonds, including junk bonds, traded lower communicating the failure of credit.<br /><br />The ECB’s subordination of credit and massive issue of credit commenced disinvestment out of credit instruments. Credit failed today as investors sold out Bonds, BND, LAG, AGG, expressing a loss of confidence and trust in the world central banks’ monetary policies. The world is passing through peak credit. theyenguyhttps://www.blogger.com/profile/08515095308836729043noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-81202305893919277912012-03-01T22:23:32.459-08:002012-03-01T22:23:32.459-08:00Hi there, I noticed your blog via Google while try...Hi there, I noticed your blog via Google while trying to find a <a href="http://www.capitalstars.com" rel="nofollow">stock tips</a>Nishihttps://www.blogger.com/profile/11369260319101716082noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-42474895534122168212012-03-01T20:51:47.726-08:002012-03-01T20:51:47.726-08:00Unknown: you have missed my point, which is that r...Unknown: you have missed my point, which is that relatively low PE ratios at a time when corporate profits are at all time highs necessarily implies that the market expects profits to decline in mean reverting fashion. In other words, the market is priced to a huge decline in profits, which although rational from a mean-reverting sense, is nevertheless quite pessimistic. What if profits don'tScott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-58516570701652070992012-03-01T19:54:02.902-08:002012-03-01T19:54:02.902-08:00By Warren Buffett
"Why Stocks Will ALWAYS Be...<b>By Warren Buffett</b><br /><br />"Why Stocks Will ALWAYS Beat Bonds and Gold"<br /><br /><b>FORTUNE</b> -- Investing is often described as the process of laying out money now in the expectation of receiving more money in the future. <br /><br />At Berkshire Hathaway (BRKA) we take a more demanding approach, defining investing as the transfer to others of purchasing power now with theWilliamhttps://www.blogger.com/profile/04418491109912775561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-32780305652755043972012-03-01T17:11:50.168-08:002012-03-01T17:11:50.168-08:00Always sound reasoning by Scott, but think that re...Always sound reasoning by Scott, but think that reason (b)(regarding cheapness of equities) is not logical: "corporate profits according to the NIPA are at all-time nominal highs and all-time highs relative to GDP" should not be an argument for higher p/e ratios but the opposite: a reversion to the mean would suggest that profit margins will not continue to be so high, thus justifying Richard H.https://www.blogger.com/profile/11837604197337217284noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-24035833486824031122012-03-01T16:18:21.287-08:002012-03-01T16:18:21.287-08:00Once bitten, twice shy. Our memories aren't th...Once bitten, twice shy. Our memories aren't that bad. Too much business is conducted in the dark. It doesn't inspire confidence in the equity markets. Why buy a piece of a company that may have most of its operations overseas, and you have know idea what they do or how they run their affairs?Johnhttps://www.blogger.com/profile/06365403570563730880noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-1916218778995763462012-03-01T14:54:04.465-08:002012-03-01T14:54:04.465-08:00Shaeffer's Investors Intelligence Survey 2/29/...<b>Shaeffer's Investors Intelligence Survey 2/29/2012</b><br /><br />% Bulls - 51.1%<br />% Bears - 25.5%<br /><br />The % Bulls has been stuck in the 50 - 51% range since 12/28/2011. Since December, the % Bears fell 4% from 29.5%. 23.4% are looking for a correction.<br /><br /><b>LIPPER FUND FLOWS</b><br /><br />After the $41 Billion outflow from Equity Funds (including ETFs) in the 4th Williamhttps://www.blogger.com/profile/04418491109912775561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-53112939085370696962012-03-01T14:47:53.611-08:002012-03-01T14:47:53.611-08:00Interesting set of graphs---and makes one wonder a...Interesting set of graphs---and makes one wonder about the "government is too intrusive" mantra. Really? <br /><br />I want smaller government, but corporate profits as share of GDP are surging. Good news to me, but where is this horrible governmental monster? Is that just radio talk-show host scaremongering? <br /><br />Let's hope corporate profits continue upwards, for man, Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.com