Something to think about:

**James48843** · 12-02-2009, 03:57 AM

Something to think about:

These are simply not normal times. Anything in the last two years hasn't been within "normal".

And last night, I spotted this article- which is a great technical article that deserves some thought.

Here is an extract of an important article- which really made me think:

"Regardless of which P/E ratio you choose to use, P/E ratios and by extension stocks are grossly overvalued. As the chart below shows, P/E ratios have reached levels never seen before. Notice the red line titled 'valuation reset.'

No bear market has ever ended unless P/E ratios dropped below the valuation reset level. Never before has the spread been greater between P/E ratios and the market bottom level."

You ought to read the whole article.

Here: http://finance.yahoo.com/news/After-....html?x=0&.v=1

**phil** · 12-02-2009, 04:43 AM

Yes. That's why I put a leg in the market, then decided to dump. I really am suspicious of the market right now.

It's all liar's poker, really.

http://en.wikipedia.org/wiki/P/E

P/E ratio is way too high right now. The difficulty is that the interest rates are so very low that people are starting to edge back into the markets again. Beware.

**tsptalk** · 12-02-2009, 05:30 AM

Originally Posted by James48843

"Regardless of which P/E ratio you choose to use, P/E ratios and by extension stocks are grossly overvalued. As the chart below shows, P/E ratios have reached levels never seen before. Notice the red line titled 'valuation reset.'

No bear market has ever ended unless P/E ratios dropped below the valuation reset level. Never before has the spread been greater between P/E ratios and the market bottom level."

Good post James. This is one reason I have turned to technical analysis over fundamental analysis. Sometimes the moves don't make any sense and the market moves in one direction or the other for much longer than seems reasonable. The market will correct again, but the charts and indicators will likely let us know when, a lot more accurately than the fundies will.

**alevin** · 12-02-2009, 05:31 AM

Yep, Ive been watching the GAAP P/E ratios scream skyward for months, reason I've been mostly out. the high-frequency trading has been the big boys playing tennis and lobbing the ball higher and higher and higher. One of these days, somebody's going to miss and that ball's going to hit the ground. Hard. just a matter of time. Can only cut inventory and operating costs so far before there's nothing left, especially if can't get a new loan to buy replacement inventory or new equipment or whatever.

**alevin** · 01-25-2010, 04:31 PM

http://www.minyanville.com/articles/.../index/a/26478

Several indices showed intermediate trend-change warning signals at the close on Friday. FXI, SOX, DOW. Gold and Oil close but not there quite yet.

**grandma** · 01-26-2010, 02:18 AM

James' linked article reminded me I had heard of `the four horsemen' before - but had not given them any thought until re-reading this now.

Market Talk / Nov. 5 - Nov. 11
Market Talk / Feb. 26 - Mar. 4

And, James I appreciate the information on the p/e ratio -
-is there Any kind of a graph, statistics report, whatever, that can be read & that be it??? I have to remember - No!!!

**James48843** · 01-26-2010, 03:18 AM

Current S&P 500 PE ratio: 19.89 to 1.

from: http://www.multpl.com/

PE_Ratio_01_25_10.jpg

**James48843** · 01-26-2010, 03:24 AM

From: http://www.multpl.com/unemployment/

unemployment-01-25-2010.jpg

**Frixxxx** · 01-26-2010, 02:14 PM

James,

You always come up with these terrific little nuggets!

Off through the wild blue yonder! I think I will reposition my allocations.

The four horsemen was a great reminder, grandma, I had to reread them as well. Man I miss Spaf!

+1 James!