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« Pundits on "Pandering" | Main | More on "The Lost Decade" »

March 26, 2008

Comments

Mike

..."Even fewer, of course, read 'A Dash.'"...

I am glad to be counted among those few. Thanks for your work!

Brian

Why did the author of the article choose 1362 which was the close on April 27 1999, not quite a decade ago? Why not choose the close of 1225.5 on March 3? Were investors more likely to rush into the market on April 27 than say March 3?

My crude, back of the envelope calculations, not factoring in dividends and inflation, is that in total the S&P has gained 9.29% from 3/3/1999, but from 4/27/1999 that total move is -1.59%

Bill aka NO DooDahs!

The indices’ performances are irrelevant as benchmarks, anyway. Your system, your asset allocation, and your personal triumph over the fear and greed responses you have to the market, will be the REAL determinants of your success.

Mike C

Is it a "stock market" or a "market of stocks"?

I wish more articles in the media focused on this distinction. Even some commentators/managers whose analysis I generally find compelling tend in my opinion to spend too much time and effort on "stock market valuations" instead of making the case why stock ABC or stock XYZ are undervalued or overvalued, or really digging for the compelling individual stock that is a bargain.

Since 1999, the S&P 500 hasn't done much but how about the performance of numerous individual stocks in the energy and materials sectors? Alot of 5-10x baggers.

For the record, even though the S&P 500 has declined 20% from peak levels, I still do not believe it is priced anywhere near where it needs to be to deliver long-term (5-10 years) returns of 8-10%.

Kass presents some interesting comparative valuation statistics, but the evidence tends to show the single best predictor of long-term returns (not 1 year or 3 years, but approx 10 years like 99-08) is initial P/E and we are still on the highish end of the range at 17. Whatever the market does over the remainder of 08 is more likely to be driven by technical and sentiment factors then any particular valuation statistic.

Despite that view, I am still finding numerous attractively priced individual stocks. I won't name them but there are a couple of energy E&P names with mid-teen multiples that will likely grow EPS at 20%+ over the next 3 years.

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