Sometimes it cracks me up to read or watch the "pros" as they attempt to predict where the market is heading. Strike that: it always cracks me up.
I like to think that I don't walk around with my head completely in the sand, but I have long ago stopped paying much attention to the various indicators and gauges that supposedly tell me what to do with my money. Seldom are they right, often are they contradictory (let's play a game... you give me one pundit's outlook on the market, and I'll find a diametrically opposing view in 30 seconds or less or will buy you a lottery ticket), and always are they carefully constructed: pulling just the right information over just the right period of time, to support just the right outlook the pundit's firm is marketing to their client base at the time.
Here's a new one I've never run across: Citigroup's Panic/Euphoria Model, or "The Other P/E". Read it and post where you think the market is heading between now and the end of the year. Up, down, or even. Your guess is as good as anyone else's, I'm sure.
1 comment:
That's pretty funny!
I suppose, to an extent, the new P/E seems to account for common sense.
I wouldn't trust it though. I'm reading the book "A Random Walk Down Wall Street" now, and based on what I see there, a good indicator of whether a stock is overpriced or underpriced is the real P/E ratio or multiple. Examples from the book show that stocks trading at 100 or higher, are woefully close to crashing. That kind of ratio is too high to be supported.
I'll talk more about the book as I get into it more.
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