Bailout
Is that a light at the end of the tunnel or a train coming at us!?!
posted by Odoacer at
11:26 AM
Friday, October 03, 2008
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9 Comments:
There is a light.
People need to take a few breaths and chill out.
IN 2001 MCD and disney both traded down like 2/3 of their market cap. We are no where near there. Good companies are still doing well.
The people that did not understand the business cycle are getting hammered just like we said in our presentation that earned us a B in the class.
I bought in today but not big.
Valuation was a bigger issue in 2001. I dont think you are going to get that type of decline in non-cyclicals this time around. At least I hope not.
Shorting has not been "risky" for about 1 year. Thank god I cant short.
I still think that the short ban makes a little sense because you should not be able to make risk free money.
Yep, it was a train.
Why have stocks not already priced in a horrible recession? Why are they getting beat up when they announce what everyone should be expecting?
Efficient market my ass. We already knew the markets were irrational. Now we can say the markets do not incorporate information appropriately.
Valuation looks fine now, until you realize that earnings are going a lot lower for some of these companies. Put me in the "we've yet to see bottom" camp.
As financiers should we use multiples of recession earnings to value things?
Put me in Warren Buffett's camp.
There are many companies and securities worth more alive than dead right now.
oops I meant more dead than alive.
At some point people stop valuing stocks on earnings and they value them on book or sales. Thats how you buy the cyclicals when their P/E's are really high. Yes, I do realize book values can get written down and revenues can decline.
I am trying to figure out what I should be thinking about when a recovery begins. At a total loss right now.
I dont subscribe to the print addition of barrons anymore so I usually check the online version on Monday to see if there was anything of interest. I see the cover title was why things are better than we think. Given Barrons is probably the most reliable contrary indicator on earth, I might short everything now. I am not sure if I am joking or not.
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