Comments on: Time Capsule Post (2010 Forecasts) — Open One Year Hence

By: The Enterprising Investor’s Guide 12-21-2009 | The Razor's Edge

The Enterprising Investor’s Guide 12-21-2009 | The Razor's Edge — Mon, 21 Dec 2009 17:40:08 +0000

[...] interesting note was published on Barry Ritholtz’s blog last week that compares some top Wall Street strategists predictions for earnings in 2010. [...]

By: leftback

leftback — Fri, 18 Dec 2009 00:38:54 +0000

Multiple Contraction is notably absent from these predictions… all these guys have P/E values between 15-20.
As BR has pointed out, most bear markets end with single digit P/E ratios, and we haven’t been there yet.

Another ratio LB likes to monitor is the following ratio. SPX dividend yield (2.1) v. the 10y yield (3.47). So that’s about 0.60. Last February this was 6.0/2.50 or so, or in excess of 2. Keep your eye on this measure.

High end housing is going to crumble in 2010, negative equity is going to be extreme for the homeowners, the remaining builders and the bag-holders for these instruments (regional banks and insurance companies who hold mortgages or prime MBS) are holders of US high yield debt and equities. Can you say liquidation?

Anyone want to bet that 2010 EPS will be higher than 2010 peak VIX?

By: some_guy_in_a_cube

some_guy_in_a_cube — Thu, 17 Dec 2009 22:59:36 +0000

Predictions are fun, but useless.

By: tagyoureit

tagyoureit — Thu, 17 Dec 2009 15:50:45 +0000

I don’t see what the big deal is, I get the same result simply by recycling 2005 Operating Earnings (bottom up).

12/31/2005 1248.29 $20.19
09/30/2005 1228.81 $18.84
06/30/2005 1191.33 $19.42
03/31/2005 1180.59 $18.00

Things are just as they were five years ago. ;)
Don’t sweat the bailouts, unemployment or the value of the dollar.

www2.standardandpoors.com/spf/xls/index/SP500EPSEST.XLS

By: phb

phb — Thu, 17 Dec 2009 15:32:11 +0000

maybe its the point, but those are all Sell-side guys, what’s the Buy-side fraternity say?

By: d4winds

d4winds — Thu, 17 Dec 2009 15:08:55 +0000

re “When all the experts and forecasts agree — something else is going to happen.”

So funny–and so true!

By: Andy T

Andy T — Thu, 17 Dec 2009 15:00:42 +0000

I like how all the forecasts are higher…talk about herding.

By: Mannwich

Mannwich — Thu, 17 Dec 2009 14:52:01 +0000

All together now! EPS estimates seem a bit high, no?

By: catman

catman — Thu, 17 Dec 2009 14:43:42 +0000

This is the talent we are always hearing about that must be paid boatloads of money or they will debark leaving our nation and the world adrift?

By: ToNYC

ToNYC — Thu, 17 Dec 2009 14:29:21 +0000

Are these Es in the EPS based on their paying back the TARP with mark-to-model toxic waste so blessed so they can save the real cash to pay cowboys and continue the Thelma and Louise playbook?