falcon2382

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  • U.S. Economy’s Uncertainty Spells Opportunity in Months to Come
    The P/E is a great tool for measuring a stock WHEN the future looks promising beyond at least the next year. But with the current situation at hand, the TREND in financials is likely to continue for at least the next couple of years (i.e. lower earnings). In fact, it is unlikely that many of the financial companies mentioned in this article will improve earnings (and certainly not profits) for quite some time into the future. History also shows that when nearly all companies in a particular sector are trading at historically low P/E's that relative to each other they are no more valuable than each other on a P/E basis. That is why you absolutely MUST look further into the books and anticipate future losses/gains. The author does not mention anything at all about WHY the companies' P/E's are so low or the fact the every single one of the companies mentioned has unrealized future losses in the pipeline. Merely unfounded assurances without any foundational basis. If you want to know whats going on right now take a look at the LTCM crisis of the 90's. During that time period the stock market and the bond market was getting rocked and the media said it was because of the Monica Lewinsky event! Give me a break!!! Here's some real advice... wait for the next shoe to drop... on that panic day (which will come) when everyone realizes they "misjudged" how bad this situation is and everyone is trying to get out the back door at the same time, use that opportunity to climb IN through the window--you'll have the house to yourself! But until then--and you will know it when the day comes because it will be a very similar day as the Friday when they announced the Bear Stearns issues and Bear dropped to $2/share (just to jump back to $10/share a week later.) And if the day never happens, don't hate yourself for being prudent. It's much easier to laugh from the sidelines....
    Jun 08 05:12 am |Rating: 0 0 |Link to Comment |View article

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