Anybody Buying Yet? Where’s the Bottom?

[Flatrock]

Fair point. Because I have lived through numerous instances in my career of professionals telling me it doesn't matter...until it ultimately does. We are in another one of those times and I keep telling people trying to justify it as the new normal (which I will agree with to some extent) that "it will matter at some point". 30yr avg PE for S&P is 17. We are at 22. That is a long way from cheap. Expensive stocks have a lot built in regarding expectations. It only takes a small piece of news to send them falling.

Whether we're expensive or not is just your opinion. Historically yes but maybe not in our current condition. We may be priced appropriately right now. You've been saying we're expensive for nearly 6 years on this thread. Plenty of commentators have been saying the same the last 10-15 years.

As the S&P has become more and more tech heavy, I would fully expect the average PE to rise. Tech stocks have just about always had higher growth rates, higher profitability and higher PEs.

 

[LopeHunter]

I’m patiently waiting for my unconstitutional tariff refund check.

But, but, China pays the tariff, right? Right? Do not tell me my cult leader and his minions were less than truthful. TDS, mojo. When is the next cult meeting? I need to get my talking points for why abusing cops on J6 was patriotic and why hanging out with pedo pimps is a nothing burger. I need to buy some more Bibles and hats, by golly!!! Stand up if you agree and applaud.

 

[SAJ-99]

Whether we're expensive or not is just your opinion. Historically yes but maybe not in our current condition. We may be priced appropriately right now. You've been saying we're expensive for nearly 6 years on this thread. Plenty of commentators have been saying the same the last 10-15 years.

As the S&P has become more and more tech heavy, I would fully expect the average PE to rise. Tech stocks have just about always had higher growth rates, higher profitability and higher PEs.

Ok. I guess. I’m not going to argue semantic definitions. Although you say it may be expensive historically but not expensive has my head spinning a little. Expensive is just a condition of measurement. People are paying more. Not bad, not good, just an input into decision making. The market has been expensive for a long run now with only occasional dips into reasonable that have been strongly bought by participants, including myself.

I have argued both sides of this with a LOT of people over the years. In this thread I like to see what the average person thinks, so it may look a certain way that isn’t completely accurate. I acknowledge that the overall average PE has increased from (15 to 17) due to increased market participation (democratization of investing) and it is a good thing for all. I get the tech argument, and even agree. The sector has driven the US market outperformance for decades now. However, the software sector looked invincible in November and has lost -25% in three months. Valuations matter. Investing isn’t about yesterday, it’s about tomorrow. It’s not about the high PE*, it’s about the expectations built in needed to reach those future earnings. It’s been that way forever- Railroads, radios, autos, oil cos, etc. Nothing stays the same.

*the highest PEs are often seen in recessions when earnings denominator is depressed, but stocks are actually a good buy at those times. But when the stock market is near and all time high, earnings are at an all time high, and the PE is in the upper 90% of valuation, I’m comfortable using the word “expensive”. YMMV.

 

[BigHornRam]

Cramer kiss of death alert!

Jim Cramer Says Oil Sell-Off Is Green Light For New Bull Market Even As Exxon Mobil, ConocoPhillips Shares Slide - Exxon Mobil (NYSE:XOM) - Benzinga https://share.google/eKTjG532ZQR5PTbAq

 

[Bonasababy]

You mean that should end Cramers run once and for all? I think too many people are too eager to chase the next sure thing Cramer tip.

The US market is priced high according to just about everyone.

That doesnt mean a crash is looming...but IMO it does limit upside and increase risk. Whether that matters depends on your time horizon.

Scary times for a lot of folks like me that worry about a hit to retirement funds early in retirement.

 

[brymoore]

But, but, China pays the tariff, right? Right? Do not tell me my cult leader and his minions were less than truthful. TDS, mojo. When is the next cult meeting? I need to get my talking points for why abusing cops on J6 was patriotic and why hanging out with pedo pimps is a nothing burger. I need to buy some more Bibles and hats, by golly!!! Stand up if you agree and applaud.

By my rough calculations, I paid $10k+ in tariffs last year which includes $8.8k tariff to GM for a vehicle.

I don’t expect anything back but I’m going to start harassing GM for my $2.

 

[406dn]

BHR is asking a good question on XOM. It the company's future worth paying 23x yesterday's earnings? Oil is only $76, so at some point it is a bet on price of oil and the impact on demand. Those energy companies have stopped being cheap. Now the wager is different.

My mindset is longer term, than whether XOM stock is cheap or expensive today. All of my stock in the company has a cost basis far below the current price. All I have expected from the stock since retiring, is to spin off a nice dividend, to help fund my retirement, which it has done. I expect the dividend to continue to get increased, as it has for many years.

I watched several fellow XOM employees day trade their retirement nest egg away. I am much more into buying, what I think is a good company at decent price, and letting it ride. So far it has worked better than I would have anticipated.

 

[Gulf of America]

By my rough calculations, I paid $10k+ in tariffs last year which includes $8.8k tariff to GM for a vehicle.

I don’t expect anything back but I’m going to start harassing GM for my $2.

Only way you'll see anything from tariff paybacks is in your investment account. Tricklin' down to the haves while the have-nots keep taking it on the chin.

 

[brymoore]

Only way you'll see anything from tariff paybacks is in your investment account. Tricklin' down to the haves while the have-nots keep taking it on the chin.

I expect nothing however I’m following the issue. A Fed judge told the government to pay the tariffs back to the companies charged tariffs. If (big IF) that happens, the companies are then going to be sued by everyone to get the tariffs they paid back.

I want my $2!