"This is a bull market for stocks, not the economy"
MoneyWorksForMe posted this in DragonLZ's last blog. This something I hear all of the time (with slight variation in words), but I never understand it.
Yes, what the Fed is doing is not good long term for the economy, the printing press is crazy, etc.
But if the economy is doing so horrible, and its just stocks going up because the fed putting a floor on the market, why is the p/e around 16? If the economy was truly horrible, earnings would be falling, and with a rising market and falling earnings, p/e would be really high, like 25-40...But a p/e of 16 isn't really that outrageous..so how could the market be going up with the economy going down but a p/e staying at about average?