It feels kinda bubbly right now

[DWCAP]

So I dont know what it is, but my spidy sense is calling BS on this stock market rally and ‘let the good times roll’ reality we are living in. Something just isnt adding up in my head. Maybe a few piggs could straighten me out.

So the stock market is doing damn well right now, at 9200. Up each week by another 10-12%. It wasnt long ago everyone thought we would be range bound in the 8100-8700 area for the rest of the year or more, but that popped rather quick. But I ask myself why are stocks doing so well, what changed from only a few weeks ago?

Well the obvious one is earnings. Earnings have been better than extected, so prices are up. That would be a great thing, cept earnings are coming almost entirly from cost cutting, not new sales. Look here is an example:

[quote]”Among other companies reporting results, telecom Motorola (MOT, Fortune 500) posted higher quarterly earnings that topped forecasts on weaker revenue that missed. The company shipped 14.8 million phones in the quarter, nearly half what it shipped a year ago, but more than what analysts expected. Shares gained 7%.”[/quote]
http://money.cnn.com/2009/07/30/markets/markets_newyork/index.htm?postversion=2009073011

Motorola shiped HALF the phones it did last year, and revenues are not living up to expectations. That says that profits are growing by cost cutting, say 4000 jobs cut in Jan…, not better sales. And this isnt a strong company. Motorola has been struggling for YEARS, loosing market share and sales even when times were good. And shares are being bid up? WTF? There is no real long term plan here, unless it is pump-and-dump.

Nearly every single press release screams “profits higher” and when you read the fine print it says ‘higher than expectations, with sales and revenue down from last year’. So the moronic analysts missed cost cutting, forgetting to add in all those job cuts to the bottom line. And that is good news?

OH and the other fun to cite reason is the unemployment rate. Never mind the fact that investors seem to pick and choose between weekly claims or continuing claims for which one is happier, they both are CRAP numbers. Everyone is all excited that they are SEASONALLY adjusted lower, but last I checked the weekly claims were really still over 600k, it was just gov stats guys that are adjusting them down. Eventually they have to go back up. And the continuing claims, BLECH! Unless it changed from last week, the majority of claims are falling cause people are running out of benifits. They are loading up on the stimulus roles, but no one counts them. That isnt economic improvement, it is reshuffling the numbers to hide the fact things are getting worse.

Or Houseing. New house sales were up, but prices were down. And that comes on the heels of 4.5% interest rates, tax rebates like never before, and the ability to bounce off record lows, IN THE SPRING. With everything and its congress rep going for housing, we get a small uptick in sales and fallnig prices? Whoppie! At lower prices there is more demand, who would have thunk it!

And to top it off I see articles like this:
http://money.cnn.com/2009/07/29/markets/thebuzz/?postversion=2009072913

Now I dont trust this guy at all, and dont know China buisness, but if China Banks are on track to lend 3X as much money as they forecast this year, and the US consumer not buying, where is all this new Chinese merchandise gonna go? Europe? They are worse than us. Domestic consumption? Unemployment in China is high and consumption is historically quite low, atleast compared to the US. There would have to be large changes in the historical norm, which I guess is possible, but why would it change so suddenly?

I guess this got way too long, but I just need someone to show me the light everyone else but me sees. Otherwise I smell releaf rally disigned to pump up big bank profits and deflate J6p’s 401k.

[pencilneck]

http://martincapital.com/chart-pgs/Pg_per.htm

The S&P P/E ratio says it all, in my opinion. This above chart isn’t very good, as the PE ratio is actually lot higher (in the 700’s).

I agree that the stock market looks hugely overvalued.

[pencilneck]

http://martincapital.com/chart-pgs/Pg_per.htm

The S&P P/E ratio says it all, in my opinion. This above chart isn’t very good, as the PE ratio is actually lot higher (in the 700’s).

I agree that the stock market looks hugely overvalued.

[pencilneck]

http://martincapital.com/chart-pgs/Pg_per.htm

The S&P P/E ratio says it all, in my opinion. This above chart isn’t very good, as the PE ratio is actually lot higher (in the 700’s).

I agree that the stock market looks hugely overvalued.

[pencilneck]

http://martincapital.com/chart-pgs/Pg_per.htm

The S&P P/E ratio says it all, in my opinion. This above chart isn’t very good, as the PE ratio is actually lot higher (in the 700’s).

I agree that the stock market looks hugely overvalued.

[pencilneck]

http://martincapital.com/chart-pgs/Pg_per.htm

The S&P P/E ratio says it all, in my opinion. This above chart isn’t very good, as the PE ratio is actually lot higher (in the 700’s).

I agree that the stock market looks hugely overvalued.

[Coronita]

I don’t mind the bubbly right now frankly. In fact, I’m pretty happy about the bubblies

Can’t beat them, join them.

[Coronita]

I don’t mind the bubbly right now frankly. In fact, I’m pretty happy about the bubblies

Can’t beat them, join them.

[Coronita]

I don’t mind the bubbly right now frankly. In fact, I’m pretty happy about the bubblies

Can’t beat them, join them.

[Coronita]

I don’t mind the bubbly right now frankly. In fact, I’m pretty happy about the bubblies

Can’t beat them, join them.

[Coronita]

I don’t mind the bubbly right now frankly. In fact, I’m pretty happy about the bubblies

Can’t beat them, join them.

[Nor-LA-SD-guy]

I think it’s just this thinking that keeps it going, because of this (the wall of worry).

investor sentiment is not overly bullish although it is getting more so and that kind of keeps fueling it as more and more bears slowly give up,

Currently I have to admit I am out of the market and wish I was like FLU (once again).

But I am not going to chase it either, (at least until I see what comes in October).

Nor am I going to try to short it, (at least until I see an all in mentality anyway)

Or I start seeing a lot of you guy’s saying how everyone should be invested in stocks right now.

(kind of like Oil and Gold etc…)

[Nor-LA-SD-guy]

I think it’s just this thinking that keeps it going, because of this (the wall of worry).

investor sentiment is not overly bullish although it is getting more so and that kind of keeps fueling it as more and more bears slowly give up,

Currently I have to admit I am out of the market and wish I was like FLU (once again).

But I am not going to chase it either, (at least until I see what comes in October).

Nor am I going to try to short it, (at least until I see an all in mentality anyway)

Or I start seeing a lot of you guy’s saying how everyone should be invested in stocks right now.

(kind of like Oil and Gold etc…)

[Nor-LA-SD-guy]

I think it’s just this thinking that keeps it going, because of this (the wall of worry).

investor sentiment is not overly bullish although it is getting more so and that kind of keeps fueling it as more and more bears slowly give up,

Currently I have to admit I am out of the market and wish I was like FLU (once again).

But I am not going to chase it either, (at least until I see what comes in October).

Nor am I going to try to short it, (at least until I see an all in mentality anyway)

Or I start seeing a lot of you guy’s saying how everyone should be invested in stocks right now.

(kind of like Oil and Gold etc…)

[Nor-LA-SD-guy]

I think it’s just this thinking that keeps it going, because of this (the wall of worry).

investor sentiment is not overly bullish although it is getting more so and that kind of keeps fueling it as more and more bears slowly give up,

Currently I have to admit I am out of the market and wish I was like FLU (once again).

But I am not going to chase it either, (at least until I see what comes in October).

Nor am I going to try to short it, (at least until I see an all in mentality anyway)

Or I start seeing a lot of you guy’s saying how everyone should be invested in stocks right now.

(kind of like Oil and Gold etc…)

[Author]

Posts