Comments on: Stocks: Detached from Reality http://dailyreckoning.com/stocks-detached-from-reality/ Economic News, Markets Commentary, Gold, Oil and Investing Strategies. Sun, 27 May 2012 07:34:04 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: daddysteve http://dailyreckoning.com/stocks-detached-from-reality/#comment-16584 daddysteve Tue, 28 Jul 2009 21:13:13 +0000 http://dailyreckoning.com/?p=17462#comment-16584 "mark to model" accounting. anyone? “mark to model” accounting. anyone?

]]> By: tony bonn http://dailyreckoning.com/stocks-detached-from-reality/#comment-16577 tony bonn Tue, 28 Jul 2009 20:29:39 +0000 http://dailyreckoning.com/?p=17462#comment-16577 zerohedge asked a good question about sp500 prices to which i morphed the question into what were earnings for the past 3 quarters plus expected earnings for next....then what multiple is that earnings worth? even if you think that the sp500 would earn 50 usd and value that 20x then it yields sp500 at around 1000 near where it is now.... given the last quarter results seen so far i think that is preposterous....for me 20x would require double digit profit growth due to comparable sales growth....right now profit growth is coming from cost cutting and that won't change too much next quarter...gdp is contracting folks. i would value stocks at 5-8x earnings given the macro economic environment... zerohedge asked a good question about sp500 prices to which i morphed the question into what were earnings for the past 3 quarters plus expected earnings for next….then what multiple is that earnings worth?

even if you think that the sp500 would earn 50 usd and value that 20x then it yields sp500 at around 1000 near where it is now….

given the last quarter results seen so far i think that is preposterous….for me 20x would require double digit profit growth due to comparable sales growth….right now profit growth is coming from cost cutting and that won’t change too much next quarter…gdp is contracting folks.

i would value stocks at 5-8x earnings given the macro economic environment…

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