Every time the stock market reaches a new high, the pundits say it is too expensive.... (bonds, investor)

[mysticaltyger]

There are pundits who say all kinds of things about the stock market and they're saying stuff all the time. It's nice to hear their opinions from time to time, but it's usually best to tune them out.

[NewbieHere]

I've learned not to look at PE ratio, that's for amateur investors.

[mathjak107]

you have to look at the whole picture . this bull market is going in to 8 years . typically we have a 20% -50% drop just about every 7 years .

so it is not as much as stocks are expensive as they are running out of steam .

dividends are up almost 38% . we have quite a few major s&p 500 company's paying out more in dividends than they earned .

basically these company's are saying here is your money back we just can't grow it .

they are doing very little capital spending to improve future productivity or increase market share .

what money they tend to spend has been going for stock buy backs not growing the business's .

earnings were down overall the last 4 quarters , so now you have less earnings and more money being given back un-used , un-invested as dividends .

so at this stage you have to ask yourself is it worth 5 or 6% in returns for risking a 20-50% loss ?

that is the real issue with stocks and the questions the big stock traders are asking themselves . suddenly a treasury bond at 1.50% looks damn good lol

[NewbieHere]

Mathjack, if I had invested $100k at the peak in 2000. Assume I invested it all in SP500. How much did I end up in the aftermath of 2009? I don't know if there is an easy calculator to plug in numbers like that.

[mathjak107]

i can tell you

[mathjak107]

i can go jan 2000 to dec 31 2009.

1 dollar was worth .91 cents including dividends .

if we do 2000 to 2008 it was .71 cents with all dividends reinvested .

[NewbieHere]

I was thinking near the peak in 2000 and near the low in 2009. Perhaps Mar 1, 2000 and Mar 1, 2009. Assuming one didn't time the market, but unfortunately buy in at the high and had to sell at a low. How much worse off would they be? Is it really 40% lost?

[mathjak107]

yes , that was the s&p 500 . some index's were worse and some stocks like banks ,auto's , oil were pummeled a lot worse

[FREE866]

Bear markets don't start with the significant amount of pessimism that is out there right now. A correction? Sure, that could always happen.If you're a trader that matters; If you'
re an investor it's irrelevant.

There's plenty to like about this market. A healthy signal for stocks is the continuation of deals – there have been over $176 billion in deals over the past two weeks. Most recently was the $4.3
billion deal with Global Infrastructure Partners and Gas Natural SDG.

That and the economy is growing, albeit slowly, and 70% of companies beat earnings expectations. Valuations are not crazy either.

[mathjak107]

remember what beating earnings expectations means . it means if the bar is set low enough by analysts anything better than doing worse is beating earning expectations . the earning themselves are still down from what they were . p/e's go higher because earnings don't .