How low can the market go?

[ERICOPOLY]

I'm just going with what the earnings are going to be over the next 10 years as the predictor of how stocks are going to fare.

 

The last 10 years matter to the prior owners.

[Myth465]

I figure the markets can go very low. Everyone is realizing something a few smart people understood years ago, the Emperor has no cloths on in Europe and they dont have a solution to whats going on. That's got to be frightening for someone whose job it is to buy Euro Bonds.

[eclecticvalue]

One thing people are forgetting about is the super committee meeting on capitol hill the decision will be coming on Nov 23rd. That will be a major event to watch for and also Europe because somehow the market think europe will cause problems for us even though I hope we do not hold any of their denominated currency in debt.

[S2S]

I'm just going with what the earnings are going to be over the next 10 years as the predictor of how stocks are going to fare.

 

The last 10 years matter to the prior owners.

 

Are you taking on new investors?

 

I interact with sell-side analysts on a regular basis. The profession (and its professionals) might be the butt of many jokes, but in my estimation, collectively, the group's average IQ would probably come in at 135 or so. And even though they might bat .500 at best when it comes to estimating near(to say nothing of long)-term future performance, they still understand their coverage universe better than 99.9% of investors.

 

I don't know any analyst who thinks he/she knows what the next 10 years look like for one company. Never mind the overall market/economy with thousands after thousands of constituents.

[ERICOPOLY]

I'm just going with what the earnings are going to be over the next 10 years as the predictor of how stocks are going to fare.

 

The last 10 years matter to the prior owners.

 

Are you taking on new investors?

 

I'm a private investor. 

 

The earnings of the next ten years will define the stock performance, but we don't know what those earnings will be and the last ten years don't give us an answer.  We just know that the price/earnings at the moment are historically low and so is the inflation rate, so real earnings are very high.  The Schiller P/E being high at the same time only tells us that the earnings per share are substantially higher today than they were early on in the past 10 years.  To bet that the Schiller P/E will foretell poor returns is to believe that the current P/E will fall a lot.  Maybe, perhaps it's the peak margins after all.  However, I own things like MBI, AIG and BAC where margins are not at the peak, so I don't care for that argument at all... really doesn't matter to me.