Markets And The People Who Forecast Them
For what it's worth -- which could be a lot if the last several months were any indication -- Wall Street's most famous bear isn't inclined to increase his year-end target for the S&P just because everyone else is. Or just because valuations have expanded.
Unless there's a material improvement in the overall earnings picture, Morgan Stanley's Mike Wilson is sticking with 4,500 SPX. That'd represent a double-digit decline from current levels, not far fetched by any stretch in the near-term (
Thanks H. I appreciate your skepticism and your realism.
It’s seems many ppl wrapped up in the markets see green lights everywhere. Absolutely nothing to worry about b/c more than any time in history the Fed is prepared to not only prevent a disaster, but this time to encourage speculation. So this time really is different.
Guess I need to be more like those seeing all the green lights. I need to work harder to accept there’s nothing to worry about, nothing could alter the perpetual move higher (including the mirage caused by a short-term downturn). The government and the trading community have finally achieved a perfect self-assembling, self-reinforcing, and self-energizing upward spiral of equity indices’ prices. I’m not ready to call it a virtuous spiral yet lol.
Despite the optimism in the market, I can’t seem to tap into it to wash away my concerns about the illusion of control.
Nobody mind the grey goo spreading outside that one laboratory, I’m sure we can contain it.
In other words, over time, companies increase earnings and stocks appreciate. The $64,000 question is how much time is enough and what is your stomach for risk? Overvaluation in stocks and real estate can be cured by low future returns rather than a crash. I suspect this is the case for residential real estate and it could well be the direction of stocks as well. It certainly seems plausible for earnings to go up but P/E ratios to go down due to slower growth and somewhat higher inflation.