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The P/E of the SPY is 13

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13

March 10, 2011 – Comments (16)

Seriously.  It's not that expensive.

16 Comments – Post Your Own

#1) On March 10, 2011 at 8:58 PM, Varchild2008 (84.06) wrote:

Hmm but if it were at P/E 12.95......then it would be undervalued.... But....*alas* it sits at 13.

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#2) On March 10, 2011 at 9:12 PM, alstry (36.12) wrote:

And the Government is borrowing OVER $1.5 trillion per year....SERIOUSLY THAT IS A LOT!!!!!

Guess what the PE would be if we were not spending today against our children's future production and burying THEM in debt....?

Seriously REALLY HIGH!!!!!

Don't you think it is about time for the kids to tell us to go to heck?

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#3) On March 10, 2011 at 9:28 PM, Valyooo (99.55) wrote:

Alstry,

It doesn't matter what you wished happened...all that matters is whats actually happening.  You know better than most that staying short against a market thats clearly poised to pop, just because you "wish it was different", is not a very good strategy.

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#4) On March 10, 2011 at 9:45 PM, rexlove (99.46) wrote:

A little correction every now and then is a good thing. The trick is in the timing. 

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#5) On March 10, 2011 at 9:52 PM, Valyooo (99.55) wrote:

Completely agreed, but thats more of a short term thing.

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#6) On March 10, 2011 at 10:19 PM, alstry (36.12) wrote:

Let's look at what is ACTUALLY happening....

RIOTING in Greece

RIOTING in Libya

RIOTING in Egypt

RIOTING in Oman

RIOTING in Yemen

RIOTING in Saudi Arabia

RIOTING in Kuwait

RIOTING in Tunisia

RIOTING in Bahrain

Gas at $4 per gallon in United States

Gas over $8 per gallon in Europe

Wheat up OVER 100%

Corn up OVER 100%

Coffee up OVER 100%

Sugar up OVER 100%

Protesting In Wisconsin and spreading rapidly....

Inflation going out of control in China.....people getting really angry....

States Bankrupt

Cities Bankrupt

Counties Bankrupt

Do you really think the Fed can keep borrowing against our children's future without WW3 breaking out.....if you think a rising stock market is a good trade off for WW3...you obviously know little about war

 

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#7) On March 10, 2011 at 10:41 PM, NOTvuffett (< 20) wrote:

What should we do Alstry? Prepare? lol.

Nobody here cares if you offer an opinion, it is welcome, we are all here to hear many voices and give each weight.

At times I have made fun of you and a few other times agreed with you, you sould have the courage of conviction not to do just a 'hit and run'.

of course, this presupposes that you are not a 'canned charactar' of MF.

 

 

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#8) On March 10, 2011 at 11:07 PM, Valyooo (99.55) wrote:

Alstry, I bet you thought they couldn't do it for a while now..in fact, I know you thought that, looking at your blogs.  You were wrong.

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#9) On March 10, 2011 at 11:33 PM, Varchild2008 (84.06) wrote:

@Valyooo

April 15th = Debt Ceiling.

Let's see how wrong Alstry actually is Valyooo...

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#10) On March 10, 2011 at 11:42 PM, Valyooo (99.55) wrote:

Maybe "this time it will be different"

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#11) On March 11, 2011 at 12:55 AM, russiangambit (29.42) wrote:

See binv's post above, E is a sideways W. -)) It might be in danger due to inflation. Even JPM is expecting companies to start warning on the E, which will affect the P/E.

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#12) On March 11, 2011 at 2:44 AM, checklist34 (99.72) wrote:

Alstry...

i still like pie.

the world is always ending, there is always something to worry about, there will always be something to worry about, some of those somethings will always be "for super reals, mega serious"

super, super serial!  as al gore saiid on south park

the market isn't cheap, but as Gambit commented, high commodity prices and the potential for an oil spike and current record profit margins are probably making people jittery and starting to worry that the E part of PE could drop.  

and with the markets players being such, such momentum people, a dropping E will result in a much lower multiple than a rising E.  "the law of momentum in the human mind", I blogged about it once.  

your point is good, if we get through the jitters the market could have a good deal of upside, but for now people need to wet their beds a bit and freak out.

maybe they are just out of cocaine in manhattan...

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#13) On March 11, 2011 at 3:23 AM, checklist34 (99.72) wrote:

valy, i like your style.  you're young, or so you've said, and also you've said fairly new to the markets.

so you sort of think your own way.  which is exactly how I made so much money in the markets:  not being entrenched enough in them to sit and start taking some of the insanity seriously. 

which is why I think I need to dump large amounts of my positions and get away for awhile, only to return if the VIX clears 30.

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#14) On March 11, 2011 at 11:29 AM, Griffin416 (99.98) wrote:

http://www.investmenttools.com/equities/fundamentals/ 

Using the fed model, the Dow should be trading at 23,000...that is 11,000 points worth of fear priced in, hehe. Or quite simply the risk/ reward for investing in stocks versus treasuries is enormously high.

By the way, if you notice in this link the Dow earnings are almost back to their peak in 2007, yet the stocks are still far from their peak. and economically there is a HUGE amount of upside left to go.

 The natural p/e for the S&P is somewhere between 17 and 19, trading at 13-14 means a heck of a lot of unemployment/ inflation fears are priced in.

The implications are that stocks are still cheap as a whole.

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#15) On March 11, 2011 at 2:06 PM, Valyooo (99.55) wrote:

Chet,

I am graduating from college in 2 months...I am not an old perv lying about my age, haha

Yeah, I definitely think developing your own style is the best way, seperate from everything else.  However, being aware of everything is necessary.

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#16) On March 11, 2011 at 6:45 PM, awallejr (81.36) wrote:

Aside from Alstry trying to get you to his website where he can sneak a buck, all he does is list things.

Look at response #6.  He throws country after country in the middle east rioting, as if that is really a "bad thing."  I view that as people finally getting rid of these thieving dictators and monarchs.  Let democracy spread.  It will disrupt the flow of oil for a time, but in the end those countries will still need to sell the oil.

However an extensive disruption really would hurt that E in PE. 

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