It is all about earnings
It takes a lot of research to come with a respectable earnings estimate for the SP 500, therefore I pirate other peoples efforts. For the next year, I have heard estimates between a pessimistic $40 and the excessively optimistic $75. With multiples ranging from 10 to 15, you get a range in value for the SP 500 between 400 and 1125.
What percent of those earnings comes from stimulus spending?
What percent of those earnings comes from normal Federal spending?
What about state and local government spending?
What percent of those earnings comes from borrowed funds?
I think we are about as richly valued as we could be given the deleveraging that needs to happen.
Quality of the SP 500 earnings are highly suspect and the more optimistic they are, the harder they are to believe.
What percent of those earnings comes from stimulus spending?
What percent of those earnings comes from normal Federal spending?
What about state and local government spending?
What percent of those earnings comes from borrowed funds?
I think we are about as richly valued as we could be given the deleveraging that needs to happen.
Quality of the SP 500 earnings are highly suspect and the more optimistic they are, the harder they are to believe.
Posted by Bradley Fluetsch at 5/20/2009 7:52 AM 
Categories: Economics
Tags: direction stock 500 gift horse SP 500 market discounted cashflows stimulus Poors earings Standard
Categories: Economics
Tags: direction stock 500 gift horse SP 500 market discounted cashflows stimulus Poors earings Standard
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