Fee-Only Financial Planning in North Carolina

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Monthly Archives: March 2009

Bear market rally arrives right on time

What happens when CNBC TV says everyone & their brother is shorting the market? It means it is time for us to sell our position in the short ETF we own. And sell we did. We sold on the day (and within minutes) of the market low. Our short ETF gained in the area of 70% in the approx 8 weeks up to that […] Read the rest of this entry »

Countries smaller than the AIG bailout

As this note “goes to press”, the federal government is preparing another $30B in aid to AIG. So far, $150B has been shoveled to it. Is this what “shovel ready” projects look like (& no we are not blaming democrats for this latest $30B)? We searched for a ranking of countries based on GDP. We found that all but 33 countries have economies smaller than […] Read the rest of this entry »

Fun with the S&P500 and Dow Jones Indices

Historic Event: the S&P500 index has its first loss in the history of the index. The S&P500 will see approx $26 of earnings for calendar year 2008. (2007 saw $66). S&P500 at current levels $780  /  $26 = 30 (P/E ratio). Long term as-reported P/E is 15.  The S&P500 is over-priced (by 2X?). Dow Jones Facts: Of the 88 20-year periods in the 20th […] Read the rest of this entry »

Price does not matter. Valuation does.

As we write this article, the Dow & S&P500 are at values seen in 1997. The Dow is in the 7000s (less than 7100); the S&P500 is in the 730s. With both indices showing values half of their October 2007 levels many are saying stocks are fairly priced – and even a bargain at these prices. To which we say – not yet – but we’re […] Read the rest of this entry »