More bottom fishing on stocks

You’d think that the “experts” would eventually learn, but when I scan the news lately, almost everyone and their brother is calling this the bottom of the bear market.  If they’re not outright calling a bottom, they’re saying “near the bottom” or something similar.

Just today I ran across these stories saying that we’re at or near the bottom in various markets.

That’s today alone!

I think they’re nuts.  They’re fruitcakes who haven’t actually taken the time to look at the numbers – or even a chart.  And as I see more people calling a bottom, I’m more sure that this isn’t the bottom.  When the bottom is truly here, almost no one will call it.  Including me.

I’m not pessimistic by nature, but I don’t see any signs of a bottom in any of the major markets.  The forward estimated P/E ratios are still sky high, and they need to drop.  P/E ratios go down either by lowering the price of the stock (the “P”) or raising the earnings (the “E”).

Since earnings targets are lower each day and still aren’t being met when companies report, I don’t see a scenario where the “E” is going up anytime soon.  That means the “P” must drop.

My conclusion is that this isn’t the bottom.


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