Counterpoint to gloom & doom

[REWahoo]

You pessimists might not want to read this.

The U.S. economy is experiencing "a slowdown, not a meltdown" and won't suffer a ‘double-dip' recession, according to Liz Ann Sonders, chief investment strategist at Charles Schwab & Co.

She acknowledges a long list of negatives facing the economy but says there are

...a number of positive trends that aren't getting enough attention and suggest GDP will remain in positive territory, even if growth is muted.

See this link for a list of 9 Reasons Why the U.S. Economy Won't Suffer a 'Double Dip'

One more thing:

...it's worth noting that Sonders called the start of the recession in late 2007 and its end in June 2009; both calls went against the grain of prevailing conventional wisdom at the time and (surprise surprise), both proved prescient.

 

[LOL!]

Didn't read it. All I need to know is that Intel stock is up more than 7% in after-hours trading after their earnings announcement. It's 1999 all over again!

 

[HFWR]

You pessimists might not want to read this.

She acknowledges a long list of negatives facing the economy but says there are See this link for a list of 9 Reasons Why the U.S. Economy Won't Suffer a 'Double Dip'

One more thing:

I don't know what she said, but I sure liked the way that she said it...

 

[Westernskies]

You pessimists might not want to read this.

She acknowledges a long list of negatives facing the economy but says there are See this link for a list of 9 Reasons Why the U.S. Economy Won't Suffer a 'Double Dip'

One more thing:

Whatthellareyoudoinganyway, ReW, trying to cheer us up? What's wrong with you?

 

[REWahoo]

Whatthellareyoudoinganyway, ReW, trying to cheer us up? What's wrong with you?

Trolling? Me?

 

[IBWino]

Here's some more counterpoint:

Nygren: Bears Need More Imagination

The S&P 500 fell 11% in the quarter, despite the continuing recovery in corporate earnings. The S&P now stands at about 11 times next year’s $93 consensus estimate of net income from operations, and it yields 2.2%. At the Morningstar conference last month, I kept telling skeptical attendees that I was bullish because it is so rare to be able to buy the S&P at three-quarters of its long-term average P/E and with a yield that is more than a five-year government bond.

 

[MasterBlaster]

For what it's worth the WSJ is quoting S&P 500 Forward estimated PE at 13.11 as of July 9th. Trailing PE is quoted at 18.07. The S&P 500 dividend yield is 2.05%.

It goes without saying that those PE stats will change as the markets advance/correct and as companies boost or cut dividends/earnings.

 

[IndependentlyPoor]

I haven't heard much about "the money sitting on the sidelines" lately. Anybody see a recent figure? For that matter, does anybody know how such an estimate is done?

 

[Dawg52]

You pessimists might not want to read this.

I like what she has to say but I would rather have a picture of her.

 

[REWahoo]

I would rather have a picture of her.

OK...

 

[Dawg52]

OK...

Better..

 

[audreyh1]

I haven't heard much about "the money sitting on the sidelines" lately. Anybody see a recent figure? For that matter, does anybody know how such an estimate is done?

Unfortunately, that money has been sitting on the sidelines for years and probably will sit there much longer. Stocks are "out of fashion" right now. People who have been burned since 2000 are very, very gun shy (mixed metaphor).

Audrey

 

[Sarah in SC]

Yeah, my boss has been trying to [-]check out Liz Ann at Schwab meetings[/-] gain some insight from her commentary for years.

 

[kumquat]

I haven't heard much about "the money sitting on the sidelines" lately. Anybody see a recent figure? For that matter, does anybody know how such an estimate is done?

Ask me, I'm a typical guy. I had to exercise most of my former mega-corp options in June and have about 30% of NW in cash (don't know where/when to put it to work).

 

[ejman]

Unfortunately, that money has been sitting on the sidelines for years and probably will sit there much longer. Stocks are "out of fashion" right now. People who have been burned since 2000 are very, very gun shy (mixed metaphor).

Audrey

I wonder if this starts to qualify for the "be greedy when everybody else is fearful" statement this timing business is sooo difficult...

 

[audreyh1]

I wonder if this starts to qualify for the "be greedy when everybody else is fearful" statement this timing business is sooo difficult...

That was Oct/Nov 2008 and March 2009....

 

[NW-Bound]

Those were good times to buy. But people are still fearful today, and I am still greedy
PS. 76% equity as we speak.

 

[W2R]

Those were good times to buy. But people are still fearful today, and I am still greedy
PS. 76% equity as we speak.

I know, I know! Me too, and all the market does is go up, and up, and up lately. Maybe later.

 

[Westernskies]

PS. 76% equity as we speak.

psst.... whatchagot?

 

[audreyh1]

Those were good times to buy. But people are still fearful today, and I am still greedy
PS. 76% equity as we speak.

The pervasive fear, doom and gloom is encouraging to the contrarian in me. But still - it is far from "blood in the streets" which are the best times to by.

I just rebalance my portfolio occasionally when it gets out of whack....

Audrey

 

[NW-Bound]

Well, I've got technology stocks like chip companies - the like of Analog Devices, Texas Inst., National Semi, Linear Tech - as well as Cisco, F5 Network, etc... Also basic material and agricultural stocks like Bunge, Potash, mining cos like Rio Tinto and Vale do Rio Doce, Freeport McMoran, and industrial cos like BASF, 3M, Cummins, etc... Throw in there some consumer staples like Unilever, Kraft, etc..., so that I can call it a "balanced meal". And then there are some energy companies, and some retailers like Lowe's...

Does it work? Well, not as well as I wanted, as evidenced by the fact that I am still 11% below where I was in 2007.

Oops, forgot that I dipped in there and spent a bit of money in the last 2 years. But I really have not added up the money that I spent. It's the remaining that counts, doesn't it?


PS. I forgot to add that I also have a bit of Alcoa who reported earnings yesterday, and Intel that reported earnings after market close today. Both did well, and lifted the market.

And how did I forget stalwarts such as Johnson & Johnson, and Berkshire Hathaway?

 

[TromboneAl]

Love that new term: "Square root recession." No one would ever understand what someone meant by that without a graphic.

 

[ejman]

The pervasive fear, doom and gloom is encouraging to the contrarian in me. But still - it is far from "blood in the streets" which are the best times to by.

I just rebalance my portfolio occasionally when it gets out of whack....

Audrey

Well yes, the "blood in the streets" period is the best time to buy. But hopefully, we will have a to settle for a little less extreme version. I grant you that March 2009 was a primo time to buy but after April of this year sentiment was so overwhelmingly negative until this past few days that it started to feel really positive. This actually is presenting a personal quandary for me because I was intending on reducing my stock allocation band from a 60% midpoint to a 50% midpoint as I approach my 60th birthday and the hidden timer in me is rearing its ugly head saying "don't reduce equities now!" Plus "you really want to add to your bonds at the time rates are the lowest in many years?"

 

[MasterBlaster]

Love that new term: "Square root recession." No one would ever understand what someone meant by that without a graphic.

T Al: your symbol doesn't really represent what people mean when using it. They usually mean that we were flying high in 2007 had the crash in 2008 and 2009 then recovered some of the gain with no real prospects for growth going forward.

the symbol should look more like this:

 

[FUEGO]

T Al: your symbol doesn't really represent what people mean when using it. They usually mean that we were flying high in 2007 had the crash in 2008 and 2009 then recovered some of the gain with no real prospects for growth going forward.

the symbol should look more like this:

That's an inverted-nike-square-root recession.