February 28, 2008: “I expect there will be some failures…I don’t anticipate any serious problems of that sort among the large internationally active banks.” - Ben Bernanke
January 20, 2009: As the dawn breaks, and we stand on the threshold of a new era, hope and optimism reign supreme. Hands are being held, hugs are being exchanged, and tears are flowing, as the old is swept away, and the new is ushered in. All things are possible, we are told, and we try to feel good because people with the best intentions are now in place. “It will be different this time, we do know what to do,” they say. “Just give us a chance, after all we’re smart people, we do have the answers, and you will feel better.”
I wish you all the best, Mr. President. But unfortunately, I’ve seen this movie before, and know how it ends. My primary goal for my clients is not for them to feel better, but to make, keep, and recover money. That sometimes demands betting against you, Mr. President.
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on BillTatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Tuesday, January 20, 2009
Wednesday, January 7, 2009
The More Things Change....
President-elect Obama ran on a platform of change. (Change, change, change, and more change!) So, of course, the first thing he does is surround himself with faces from the past that we all know and love! Everybody from Hilary Clinton, Tom Daschle, and now Leon Panetta. Therefore, we can probably assume that since you see the same old faces, then the approach to our current financial, economic, and political problems will be the same. Whether it’s Democratic or Republican, whether it’s Liberal or Conservative, using the same old solutions for our current problems could be a recipe for failure.
Likewise, using old-school investment techniques (buy and hold) in this day and age could also be a recipe for disaster. The math is really simple. Recently, for 2009, the analysts were predicting $80 per share for the S&P 500. With the S&P currently at approximately 900, that equates to a P/E ratio of approximately eleven, which is the normal P/E ratio for a recession. However, the latest analyst’s viewpoint is that the S&P earnings for 2009 will be approximately $40. Divide 900 by 40, and you’re looking at a P/E ratio of approximately 22. Based upon simple mathematics, and the earnings power of corporations, the stock market is overpriced by half.
Will the stock market go straight down? No. Periodically, there could be bouts of euphoria that could take this market higher. However, as long as the politicians continue the same old approach, it could make for a very difficult 2009. With that said, however, I will continue to trade the market that’s in front of me. Welcome to the New Year!
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on BillTatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Likewise, using old-school investment techniques (buy and hold) in this day and age could also be a recipe for disaster. The math is really simple. Recently, for 2009, the analysts were predicting $80 per share for the S&P 500. With the S&P currently at approximately 900, that equates to a P/E ratio of approximately eleven, which is the normal P/E ratio for a recession. However, the latest analyst’s viewpoint is that the S&P earnings for 2009 will be approximately $40. Divide 900 by 40, and you’re looking at a P/E ratio of approximately 22. Based upon simple mathematics, and the earnings power of corporations, the stock market is overpriced by half.
Will the stock market go straight down? No. Periodically, there could be bouts of euphoria that could take this market higher. However, as long as the politicians continue the same old approach, it could make for a very difficult 2009. With that said, however, I will continue to trade the market that’s in front of me. Welcome to the New Year!
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on BillTatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Subscribe to:
Posts (Atom)
