13 Replies to “The Great 2008 Stock Market Return To Where It Should Be”

  1. Kate,
    The thing is that Corporate America may have been inflating earnings with, now losing, positions in the Market.
    If a CFO took company money to Vegas and lost it he would be fired, but betting loses in the market are routinely covered up. The treasury of a lot of companies operates like hedge funds making money on their money. It is not clear how “winning” market bets actually find their way back into the company books..maybe happy directors with off-shore accounts?
    The fundamentals of the Market @ 8400 are sound, but we don’t know how bad the bleeding is in the background.
    BTW: The Trust funds for Harvard & Yale were shorting the market all the way down.. Turds!

  2. It’s dividends, not earnings. The Dow only yields 3.6% right now. Bear market bottoms typically see the Dow yielding 5-6%. That would imply a Dow of 5000, give or take. But since interest rates are so low, you might find a bottom at 4-4.5%. That’s a Dow of 8100-7600. So we might not be too far from a bottom. Of course, that presumes that no one in the Dow cuts their dividends.
    But when the Dow contains names like American Express, Bank of America, Citigroup, GM and JP Morgan, you have to wonder if there are going to be cuts, which might mean Dow 5000 in our future.

  3. As we speak the S&P 500 futures are up 37 pts. in the overnight market. If this gain holds, the Dow will be up 300+ on the open.
    Can’t be bad for Tory election prospects.

  4. The Dow at 8000 points might be a good thing for the younger generation. They’ll need lots of money to pay the huge national debts that my generation is leaving them. Just one problem though, they have no money to invest in the stock market. They are already in debt up to their eyeballs from having bought cars, houses, toys, vacations.
    You can talk all you want about the Boomers and what they have but when it comes to the kids of Boomers, they have grown up in homes where they got pretty well what they wanted. When it came time to strick out on their own they ran up debt trying to sustain the lifestyle they had grown up in. Not a pretty picture for many of them.

  5. Dow is within a tick or two of 9000 at this time, 12:22 pm. Anybody who bought into Friday’s fire sale is looking real clever today.
    When I watch these wild swings, I begin to get the feeling the game is rigged. I’d like to be wrong about that, but all the 401K and RRSP tax “haven” laws lead me to wonder.

  6. Thanks, I’ll take the TSX60. Haven’t touched a US stock this century. I want my 20% years withouth jaw dropping volatility; and yes, dividends are the way to go, not just because of the income, more for their signal of a healthy well managed company, that makes PROFITS.
    The best buys are also the ones that return “losses” most quickly, otherwise known as “flight to quality.” There are some awesome bargains out there right now for the selective and disciplined investor (oh, sorry, was I being insensitive?).
    Don’t be a dolt and leverage into this short term dip. If you are concerned about further drops in the next 10 days of so, then dollar average in. Commit 25% (or something like that) now, and come in with bits on further drops. Be careful not to miss the recovery, as most do, so be willing and to go 100% long quickly.
    This is when the big moolah gets made on the markets. Rising markets are too easy, and when everybody has the same idea, it is no longer a good one.
    It’s like a simple puzzle, you just have to put it together; then take it apart and do it again.

  10. Lloyd fister economics isn’t your strong point is it.
    Now run along and prattle on with all your imaginary friends.

  11. I looked at what s/he wrote and it’s hilarious. He says the chart goes to the latest of 2007 (well that’s because it actually goes to August of 2008 and since it goes back to 1871 Excel automatically rounds the x-axis to the latest full year).
    If that isn’t enough empirical evidence, try this one on for size;
    http://captaincapitalism.blogspot.com/2008/10/s-500-dividend-yield.html
    Seriously, does anybody dare challenge the veracity of my charts?

  13. If the EU is having trouble and your pillar of capitalism is having trouble how far behind are we. My house is paid for but what about people who are 200,000.00 in debt or more. Give your right wing head a shake. You’re dreaming in color.

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