Re: Unique financial nuggets
Fast forward to 2013. Eps 9.1 so 3.5 x higher in 5 yrs. Smells peak earnings to me.
Stock at same level as 2007. Doesn't take Einstein to figure out 2007 must have been peak earnings too. How abt one of u readers take this as assignment to check. Many thanks.
Re: Unique financial nuggets
So if 2013 was peak earnings one should expect bloodbath. Correct? No such occurrence. Stocks is at same levels as year ago. And at 52 week high. Implosion occurrence e is high probability.
Am I sure this will happen? Of course not. Are the odds high. I think so.
So how much would I like to see this share fall. Assume eps falls to 5. Multiply that by 11. 55 seems right. Stock at 91.
If it doesn't fall, who cares. As buffet says u get infinite strikes. Wait for the fat pitch down the middle. It will co e.
Re: Unique financial nuggets
In one of the threads abt 2 weeks ago we had talked abt a "pundit" who was bullish on the stock market while being down on Gold. Gold was at circa 1230. gold has since rallied to 1310. A cool 6.3 pct.
We recall taking said analyst to task. Not because we knew the direction of the mkt short term. But because the gentleman was recommending buying extremely high and selling gold after a 33.pct drop from peak.
Today, in general, a venerable senior member has opened a thread on fact checking. Fact check these wall street pundits. Or pundints, as McCain prefers.
Re: Unique financial nuggets
For the Brits here is some news about Tesco. It's sales dropped 3.5 pct from last year. Looks like after the 2007 fin collapse, shopping habits have changed both sides of the pond. People now prefer to go to smaller stores with greater discounts. Even the store layout was criticized.
Any folks from UK want to confirm or take the other side? Wonder what the stick has done over the last decade. Could this be a value play if it has been beaten down?
We will do an exercise on this stock over the weekend.
Meantime, remember. Asset allocation and low cost index funds with low turnover are the only free breakfast, lunch and dinner.
Now, could you pass the tea?
Re: Unique financial nuggets
^ June 23 WSJ.
Re: Unique financial nuggets
Quick. All things being equal, which would you rather have? An 8 pct yield or 3 pct?
Re: Unique financial nuggets
8 pct? Good answer.
In 2007 the spread between investor grade bonds and 10 yr US treasury was 6 %. (So if us treasury yielded 2 pct, the investor grade bonds yielded 2 plus 6 or 8 pct.
Now?
Re: Unique financial nuggets
Now the spread is 1 pct. So yield 2 plus 1 or 3 pct.
But investors r gravitating to investor grade bonds cause they yield 1 pct higher. Seriously?
Source Last week's WSJ
Re: Unique financial nuggets
Of course we have assumed us 10 yr Treasury yield 2 pct for 2007 and 2014. No matter. Logic same to same. If anything 2007 us yld 10 yr was higher than current. So stronger case for buying investment grade bonds then. But things are ash backwards.
Re: Unique financial nuggets
Regular readers of this column are by now jaded by the news of contradictions in Wall Street of the Cramer vs Cramer variety. But to find such a contradiction in one article is worthy of induction to the CHF - Contradiction of Fame.
Re: Unique financial nuggets
In the June 23 issue of the WSJ, the article title read Don't read too much into the fear gauge.
Re: Unique financial nuggets
The VIX is at 10.4. The lowest since the infamous 2007 market peak. While some say low VIX is a sign of complacency - and hence a harbinger of poor returns - the article begs to differ.
Re: Unique financial nuggets
It states in the 90s, the VIX had reached low levels in Dec 1993. While the mkt retreated initially, 1994 saw the start of a great bull market. Hence per this article the VIX as an indicator of low returns was not effective.
Re: Unique financial nuggets
I see a few people incensed. Calm down folks. Let us just use logic.
The 90s were an anamoly. A bubble in the making. To use that bubble as evidence that low VIX equals poor return is ridiculous.
Re: Unique financial nuggets
The article goes on to say high VIX was followed by drop. Again not effective in terms of predictor of downturn.
Then the article does an about turn. As the suspense builds.
Re: Unique financial nuggets
Apparently low VIX is an excellent portender (?) of poor returns over next 12 months. For lowest VIX readings the 12 months returns lagged avg returns by NINE pct points.
Re: Unique financial nuggets
The highest VIX were betterer - 12 month returns beat avg returns by EIGHTEEN pct points.
Re: Unique financial nuggets
So it is true that low VIX means poor returns and vice versa. Why the gymnastics that would do Nadia Commaneci proud?
Re: Unique financial nuggets
During the war between Germany and France today, we were given a history lesson on how long these two countries have been at odds with each other. Coincidentally in the July 2 issue of WSJ, it states a German tank company and French tank company are merging. Tanks as in those used in warfare. What's up with that.
Having no interest in war related issues our staff didn't bother to note down more details.
Re: Unique financial nuggets
For those interested, Germany won 2-1. Pretty boring game. The French did not show up. While Mueller showed he can flop with the best of them.
Germany for a gift when Brazil captain got a yellow and will miss the next game.
Did you know that prior to today’s game, Germany had received only to cards? They must never foul the opponent. Choir boys, I tells ya.
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