This one's for Lukester

[*T*]

John Authers on the importance of dividends.

You sure you are calling for a mahoosive rally Luke? :rolleyes:

Dividends have yet to be comprehensively cut... I stand by my S&P500 call... before you see new highs.

[Slimprofits]

Re: This one's for Lukester

I posted this to Jim Nickerson's bearish information thread back in December.

James M. Clash, 12.08.08

...analysts have trimmed their 2009 earnings estimates by a modest 7.5% so far for the S&P 500 as a whole, according to Thomson IBES. For their current projections to prove accurate, earnings will have to grow 15% next year to $91. That's down from the 24% gain analysts were expecting two months ago. It's before nonrecurring items, which knocked $12 off the net in the first nine months of 2008.

[..]

Even if the S&P 500's forward p/e ratio remains flat at ten times estimated 2009 earnings, that would bring it down 29% to 650.

[goadam1]

Re: This one's for Lukester

Why would it fall to 10x earnings. Tradition?

[Guest]

Re: This one's for Lukester

Why would it fall to 10x earnings. Tradition?

Yes, that 10X earnings will have to be achieved by reversion to "tradition" for these guys, because we will have to return to "more rational P.E.'s".

I don't buy it. Good luck obtaining "more rational" in the context of the distortions pictured below going forward out of this collapse. I am betting the DOW does not even collapse down past 7600-7800. IMO there will not even be a depression, at least not prior to seeing some significant fireworks from the equities which can last years. What other market can you point to in history which witnessed currency dislocations of any seriousness, where that currency zone's stock markets remained unresponsive?

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[jtabeb]

Re: This one's for Lukester

Yes, that 10X earnings will have to be achieved by reversion to "tradition" for these guys, because we will have to return to "more rational P.E.'s".

I don't buy it. Good luck obtaining "more rational" in the context of the distortions pictured below. I am betting the DOW does not even collapse down past 7600. IMO there will not even be a depression, at least not prior to seeing some significant fireworks from the equities, to last "several years".

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I don't think you conclusion is valid (I hope I'm wrong, for your sake)

You seem to only be able to look at what's been "printed" vs what has been destroyed.

Value all the money creation, then value all the money destruction, net it out, and I think you will have a good picture of reality.

BTW with unemployment going through the roof, who in the HELL is going to buy any goods and services besides the independently wealthy, the retired on a defined-benefit retirement plan and federal workers. That's does not bode well for the future me thinks.

(Besides, you are the first one to try shorting EJ, You have huge balls, I just hope the common sense is there too).

Not picking Luke, honest. I hope you knock it out of the park. But I'd bet you my entire pile of silver you are not going to.

For what it's worth.

Good luck man, hope you know what you are doing.

[Guest]

Re: This one's for Lukester

JTABEB -

No you misunderstand or mis-read. I'm not yet invested in anything other than some positions in precious metals.

I'm raising a big chunk of cash though, but it's as yet uncommitted. I am looking around at my options and I have concluded that we likely will see some very large shifts affecting the equities markets as early as mid year or before the end of 2009. Split the difference. iTulip is expecting some eruptions to commence going into 2010 so I'm hardly even straying from their script much.

Whatever I do, I'm not "diving" into anything. If a large equities rally materialises in late '09 or early '10, this equities rally can run for several years I think, so there is no rush to go tearing into it while the dust is still flying around so thick we can't even see. I think to answer your question, everyone will be able to see it occurring plain as day so there's little or no guesswork as one merely waits for it to show up.

I think it is going to show up, and it will run to a real high number out in 2012-2014 somewhere.

The only difference really between my viewpoint and some other iTuliper's then, is that likely mainstream iTulipers will regard a US indexes strong rally with extreme suspicion right up through the first 12-18 months. Then if it continues thereafter and gathers pace, some may clamber on board when they see it has legs, but it would have been better earlier.

So there's no plucking wild notions out of the air here. If it materializes, it will be quite obvious for everyone to observe. All we have to do is wait a little while. Meanwhile, I propose a new Avatar for you JTAB, for your stalwart championing of the Precious Metals, I suggest you ought to be renamed "Raging Bull".

JTABEB IS RAGING BULL.jpg

[bpr]

Re: This one's for Lukester

I'm raising a big chunk of cash though, but it's as yet uncommitted. I am looking around at my options and I have concluded that we likely will see some very large shifts affecting the equities markets as early as mid year or before the end of 2009. Split the difference. iTulip is expecting some eruptions to commence going into 2010 so I'm hardly even straying from their script much.

Whatever I do, I'm not "diving" into anything. If a large equities rally materialises in late '09 or early '10, this equities rally can run for several years I think, so there is no rush to go tearing into it while the dust is still flying around so thick we can't even see. I think to answer your question, everyone will be able to see it occurring plain as day so there's little or no guesswork as one merely waits for it to show up.

I'm just saying I think it is going to show up, and it will run to a real high number out in 2012-2014 somewhere.

Lukester, does your scenario coincide with inflation/hyperinflation/poom, or is it an equities recovery dislocated from the currency markets, due to, say an oversold state? Or a manipulated market?

[Guest]

Re: This one's for Lukester

Lukester, does your scenario coincide with inflation/hyperinflation/poom, or is it an equities recovery dislocated from the currency markets, due to, say an oversold state? Or a manipulated market?

Lets give it another six months and see what the markets actually do. If we start seeing the equity indexes as perky as iTulip suggests commodities should instead be, this will beg the question: Why are perky commodities plausible in response to fiat inflation, while perky equity indexes are not? After all, the common backdrop for both is a depressed global economy, no?

What's implausible to me, for example, is the idea of perky commodities reflecting USD inflation, while other currencies don't visibly rise vs. the USD, and all of that against a backdrop of continuing long term depressed global markets. This does not seem to me any more or less plausible than equities soaring.

Consider: soaring commodities against a backdrop of depressed global markets assumes that all the commodity producer nations are not seeing any renewed pricing power from the reinflation of commodities. That most definitely does not add up to me. For it to add up, reinflating commodities in response to fiat money debasement worldwide, must also reinflate the economies of the commodity producers.

And that provides ample reason to disagree with the current apparent 100% consensus thesis here, that "only the commodities can catch an inflationary bid in 2010". I fail to see the ironclad reasoning why commodities can and equities cannot, particularly as thes markets are tangled together anyway.

I don't see why the US indexes can't catch a strong spark from re-inflating commodities right away for instance. A large part of the commodities complex is reflected right in these same stock markets. I therefore surmise the US indexes have an excellent shot of catching a strong spark from the commodities beginning a renewed rise vs. all the fiat money (worldwide). Also a factor convincing me this is a possibility, is the extent to which this idea is so universally regarded as absurd here.

[bpr]

Re: This one's for Lukester

Thanks. So, an equities recovery is not exclusive of inflation, it's a consequence of it.

I concur that there's a lot of group think on what has to happen — particularly to equities and commodities — over the coming months, while nothing would surprise me here.

[Guest]

Re: This one's for Lukester

there's a lot of group think on what has to happen — particularly to equities and commodities

Yup. iTulip threw it out there as a "probable" that commodities would be what caught the bid as the inflation outlet and no-one wished to pick this apart and see what else might. At least I have not read anyone wondering about whether it might be some other markets that revived as well, or even first. "We are in a long depression" becomes the mantra and people start looking at the thing like it's got a picket fence around it.

[Prazak]

Re: This one's for Lukester

I see that Bart already posted the Weimar charts I posted yesterday, that would seem to go to this same theory, attached here. And here's one from Zimbabwe's stock exchange 2005-2007.

I would like to think the analogies to Zimbabwe and Weimar from among the likes of Faber and Sinclair are overwrought. But the basic point remains, that equities can catch the inflationary fire just as commodities can.

[*T*]

Re: This one's for Lukester

I see that Bart already posted the Weimar charts I posted yesterday, that would seem to go to this same theory, attached here. And here's one from Zimbabwe's stock exchange 2005-2007.

I would like to think the analogies to Zimbabwe and Weimar from among the likes of Faber and Sinclair are overwrought. But the basic point remains, that equities can catch the inflationary fire just as commodities can.

Remember that Zim equities are mainly resource and mining stocks.

[Guest]

Re: This one's for Lukester

*T* is hanging onto his thesis like a pit bull. ;)

Remember that Zim equities are mainly resource and mining stocks.

[Mega]

Re: This one's for Lukester

Yo Luke
Just been looking @ the Silver price because people say its ready to ROCK. I took your advice last year when it was on the bones of its arse...........I done nice, nice little earner..........Thanks.
Mike

[*T*]

Re: This one's for Lukester

*T* is hanging onto his thesis like a pit bull. ;)

Grr

All in good fun. I think it's valuable to have such (apparently) opposing views when we all agree on so much.