I haven’t check in on the stocks in a while… This morning, I checked in with MSFT and it was $108 with a P/E of 50+. Historically, they should be at a P/E around 15-20. So, you are looking at a $35 stock selling for $108…
Then, I checked at&t(T). That’s a stock paying out a 6% dividend at a PE of 6.4. A company like that should probably carry a PE of around 9-10. So, that’s a $48 stock selling for $32 with a 6% dividend to boot… I was really tempted to buy here because sooner or later, when this market starts to retract, people will be looking for these high dividend stocks. That being said, the market has HATED at&t for years now, so the threat is buying this stock and watching it underperform for the next few years and licking my wounds.
And Coke (KO). Typically this is a decent buy when the P\E is under 20. It’s now at 81. I can’t even wrap my mind around that. I haven’t been following them, but a 10 second look at their revenue\earnings and it appears that they are headed downhill very quickly… Yahoo says that they only earned 1.5B in 2017. With a P\E of 81 and a market cap of 194B, I can’t wrap my head around that… How is a company that earns $1.5B a year worth $194B?
This company is probably really only worth $10 per share and it’s selling at $45. Okay sure, you can lecture me about adding up all of their assets and cash on hand, as a part of their valuation, but I’m not interested in tallying all that up. I’m okay with a rough “poor man’s valuation” at this point.
Gentlemen… When this market crashes, it’s coming down hard…
I haven’t check in on the stocks in a while… This morning, I checked in with MSFT and it was $108 with a P/E of 50+. Historically, they should be at a P/E around 15-20. So, you are looking at a $35 stock selling for $108…
Then, I checked at&t(T). That’s a stock paying out a 6% dividend at a PE of 6.4. A company like that should probably carry a PE of around 9-10. So, that’s a $48 stock selling for $32 with a 6% dividend to boot… I was really tempted to buy here because sooner or later, when this market starts to retract, people will be looking for these high dividend stocks. That being said, the market has HATED at&t for years now, so the threat is buying this stock and watching it underperform for the next few years and licking my wounds.
And Coke (KO). Typically this is a decent buy when the P\E is under 20. It’s now at 81. I can’t even wrap my mind around that. I haven’t been following them, but a 10 second look at their revenue\earnings and it appears that they are headed downhill very quickly… Yahoo says that they only earned 1.5B in 2017. With a P\E of 81 and a market cap of 194B, I can’t wrap my head around that… How is a company that earns $1.5B a year worth $194B?
This company is probably really only worth $10 per share and it’s selling at $45. Okay sure, you can lecture me about adding up all of their assets and cash on hand, as a part of their valuation, but I’m not interested in tallying all that up. I’m okay with a rough “poor man’s valuation” at this point.
Gentlemen… When this market crashes, it’s coming down hard…
T’s current PE is around 17.5. The ratio listed on yahoo of 6.4 is from the 4th qtr 2017 where the tax laws were passed and many companies had a windfall in earnings that artificially lower
I haven’t check in on the stocks in a while… This morning, I checked in with MSFT and it was $108 with a P/E of 50+. Historically, they should be at a P/E around 15-20. So, you are looking at a $35 stock selling for $108…
Then, I checked at&t(T). That’s a stock paying out a 6% dividend at a PE of 6.4. A company like that should probably carry a PE of around 9-10. So, that’s a $48 stock selling for $32 with a 6% dividend to boot… I was really tempted to buy here because sooner or later, when this market starts to retract, people will be looking for these high dividend stocks. That being said, the market has HATED at&t for years now, so the threat is buying this stock and watching it underperform for the next few years and licking my wounds.
And Coke (KO). Typically this is a decent buy when the P\E is under 20. It’s now at 81. I can’t even wrap my mind around that. I haven’t been following them, but a 10 second look at their revenue\earnings and it appears that they are headed downhill very quickly… Yahoo says that they only earned 1.5B in 2017. With a P\E of 81 and a market cap of 194B, I can’t wrap my head around that… How is a company that earns $1.5B a year worth $194B?
This company is probably really only worth $10 per share and it’s selling at $45. Okay sure, you can lecture me about adding up all of their assets and cash on hand, as a part of their valuation, but I’m not interested in tallying all that up. I’m okay with a rough “poor man’s valuation” at this point.
Gentlemen… When this market crashes, it’s coming down hard…</font id=“red”>
Yep, its just figuring out the “when”, by certain measures the market has been overvalued for quite sometime!! The Crestmont market valuation has a P/E of 32.7 which
It depends what vehicle you’re trading out of. A ROTH IRA doesn’t pay capital gains taxes so you are free to trade anytime after it is established and can withdraw after qualified.
Same with a SEP IRA except you pay the tax on withdrawal amounts versus no tax on a ROTH withdrawal.
Prepare for a Market crash??? IMO, when interest rates go up…more chance of a sell-off.
It’s gambling. Peeps were forced into the Market by low interest rates…the hook.
Yes, it is logical to think that market's will rise, until they don't... The market gets bigger each day when babies are born. I'm not well educated on "markets" and "economics" as a whole, but in the most simplest terms, there should be some expected "growth" in a healthy economy... The largest problem is when Wall Street prices in that growth way before it happens or too aggressively. If the real economy grew 3%, but Wall Street prices the market like it grew 30%, then at some point those inflated expectations have to come back to the "norm". That's why it's typically called a "correction" as these expectations and values come back to actual reality.
As far as protection, it’s hard to say. I think owning “hard assets” is always a safe play when things start to buckle. But the hardest thing is “opportunity cost” which is where I (and maybe most) struggle with the market… For example, you can own a stock that appreciates 10% every year. That sounds great unless t
By the way, I would pick physical real estate, or blue chip stocks with big dividends over bonds any day. Bond rates are low. If interest rates rise, then bonds will fall in value… If a person is looking for the stability of a bond (i.e. the fixed 3% return on the coupon), I would rather own at&t and get a 6% dividend… I would take that over bonds any day… To me, bonds are even riskier than the market when interest rates are this low…
Consider this… If you buy a bond for $1000 and it pays out 3% ($30) interest (low rates), and interest rates rise so that a NEW $1000 bond pays out 4% ($40) interest, who on earth would buy your bond that only pays out $30 when they can buy a bond that pays out $40? They wouldn’t unless you were willing to sell it for less than $750 (assuming I did my math right). In other words if the current coupon on a bond is paying 4%, and you have a bond paying out at $30, then it’s worth $750, because if I bought it from you at $750 and continued to collect that $30 coupon, then that gives me my 4% yield. So, your $1000 bond is now worth only $750.
In a rising interest rate environment, it is wise to get into very short duration bonds (1 year or less). The principal amount lost during the up coming rate hikes will only be temporary as the principal will be paid in full at the maturity date of 1 year. The market value impact until maturity is also minimal due to the bond’s short duration. 1 year US treasuries are yielding ~2.5% currently which isn’t bad for “risk free.” That’s what I am primarily invested in right now until the market crash…
In a rising interest rate environment, it is wise to get into very short duration bonds (1 year or less). The principal amount lost during the up coming rate hikes will only be temporary as the principal will be paid in full at the maturity date of 1 year. The market value impact until maturity is also minimal due to the bond’s short duration. 1 year US treasuries are yielding ~2.5% currently which isn’t bad for “risk free.” That’s what I am primarily invested in right now until the market crash…
RBF
Roger that. Good to know. I've never really considered short term bonds before. 2.5% just isn't sexy enough for me... But, it's better than 0% I suppose!
supply/demand determines price. I give you TSLA, NFLX etal. they burn cash like mdaddy buying a catamaran on a Friday before a holiday but look at their price
Why was nobody talking about how good the stock market was from 2008-2016,now it’s booming. I wonder what happened???
That would be Trump....
This thread has shown me just how little I know about our Stock Market, thank you all for this information. Time for me to actually put a little learn time into this stuff.
Why was nobody talking about how good the stock market was from 2008-2016,now it’s booming. I wonder what happened???
Nice try, but the stock market was in a boom all those years… The market was super hot under Obama. We will see one of the worst recessions on record under Trump. You can bank on that. It’s not because of Trump. It’s because, all good things must end, and he will just so happen to be in office when it does.
Also, note one thing… The “sign” of a bull market ending is when everyone around you is talking about how hot the market is. One of Warren Buffet’s most talked about quotes is:
“Be fearful when others are greedy, and be greedy when others are fearful”…
In other words, when your secretary is talking about the market, start selling…
NO! 2.5% is not better that 0.Its better than -30%!!!
The hardest part to know is WHEN is that -30% coming? If there is one thing that I am terrible on, it's market timing. I can tell you that we are due for a massive correction, but it might happen tomorrow, or the market might continue to be hot for 2 more years. I just really don't know. Honestly, we are on unprecedented ground here. If you would have asked me 2 years ago that we would still be in a bull market like this, I would have told you that you were crazy...
Why was nobody talking about how good the stock market was from 2008-2016,now it’s booming. I wonder what happened???
That would be Trump....
This thread has shown me just how little I know about our Stock Market, thank you all for this information. Time for me to actually put a little learn time into this stuff.
You might want to check your answer on that one. Obama will get credited for one of the hottest bull markets of all time under his dictatorship. Trump will get credited for one of the worst.
Before I get accused of being “anti-Trump”, I’m stating statistically likely outcomes here, not “opinions”. I’m not saying that their policies did X or Y. I’m just stating market behavior\outcomes during their time spans.
Why was nobody talking about how good the stock market was from 2008-2016,now it’s booming. I wonder what happened???
Nice try, but the stock market was in a boom all those years… The market was super hot under Obama. We will see one of the worst recessions on record under Trump. You can bank on that. It’s not because of Trump. It’s because, all good things must end, and he will just so happen to be in office when it does.
Also, note one thing… The “sign” of a bull market ending is when everyone around you is talking about how hot the market is. One of Warren Buffet’s most talked about quotes is:
“Be fearful when others are greedy, and be greedy when others are fearful”…
In other words, when your secretary is talking about the market, start selling…
I’m hoping I still have a job the next go round and can be greedy when others are fearful. Cut all my debt during this bull market and putting away cash for a rainy day.
Oldest shibboleth “Market loves low rates and easy money.”
Bum insured that condition for 8 years.
May want to take some profits in high PE stocks you own.
Historic PEs avg about 20 times.
Looked at buying some Altria on the dividend increase, but demurred.
Defensive move? Worried me.
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