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Crossing Wall Street: Stock Market Is At All Time High
Reply to @Mark: I'm leaning in that direction. I don't think there's another crisis right around the corner and I don't plan on selling anything, but I don't like to add to things in the midst of a giant wave of retail inflows after 3-4 years of giant retail outflows.
edited to add, speaking of:
Saturday, January 26, 3:54 PM ET "Apple's (AAPL) glory days are now behind it," said FBN's Shebly Seyrafi on Thursday morning with the stock at $450. ***On Sept. 13 - the day after the iPhone 5 launch and the shares at $680 - Seyrafi reiterated a Buy rating and boosted his price target to $1,000***. (FBN now maintains an Outperform on Apple with a lowered target of $650.)
No debate from me this ... I use Morningstar's Market Valuation Grpah myself as one of my tools concerning valuation. I think they do a pretty good job. I also use it as an aid in when are the better times to load equity ballast and when to off-load so to speak.
Indeed, I have found it to be a neat little tool for the individual investor, like myself.
"There will be a correction, I just don't know where or when" said every wall street analyst ever.
Charles and Skeeter, I agree with your position and I sense that the S&P 500 will end up on the year the way it's looking now. Currently I think it may take out the 1525 level but do note that we have had 8 up days in a row which doesn't happen all that often. That leads me to be cautious about a move down before we march upward. There's also been indications that the little investors have started moving back in to the market which hasn't been a good sign lately. Like Skeeter I have been accumulating cash lately instead of putting it to work and may consider taking even more profits if we jump higher. Mr. Market will tell me what to do and when.
Reply to @scott: I think AAPL is cheap. These things get pumped up and then live through a period of falling from grace. I remember that Google had fallen from grace similarly.
I do hope some of my fund managers pick up some AAPL at these levels. It may not bounce tomorrow but it is a moderately valued stock of a profitable growth company.
Reply to @Investor: I still like my idea of offering IPads to specific audiences. What about an IPad for the outdoor/North Face crowd? Waterproof, rugged body, thermometer, higher-end GPS/location (if that's possible), loaded with outdoor apps, etc. What essentially would be an IPad "toughbook" would - I think - have a lot of broad appeal, but could be particularly useful for outdoorsfolk.
I also think there's a big future in IPad/IPod as retail terminals (you're already seeing that at some chains like Nordstrom Rack and Finish Line), but I think you could invest in the point of sale companies for that (Ingenico, Verifone, NCR, etc.) as well as Apple.
Kiosks are another possibility for IPads. See:
If Apple isn't going to bring out any new products anytime soon, I do think there's new avenues for current products.
I thought I take a moment and use the World’s Most Simplest way to compute a stocks valuation that recently appeared in the Crossing Wall Street Blog; and, I will apply this formula to the S&P 500 Index itself.
In review, the formula is as follows: Growth Rate/2 + 8 = P/E Ratio
I have provided a link to the formula for those that would like to read more on it.
In review of Moringstar’s Instant Xray I will use its projected five year earnings per share growth rate for the S&P 500 Index which was currently listed at 10.33 as of 02/02/2013.
Simply enter a ticker symbol on the entry page ... I used SPY and an amount. Then click view Xray Report. On page two you will find what the current earnings growth rate is for the S&P 500 Index.
If we take the 10.33 growth rate number and divide by 2 and then add 8 by the formula this computes to a 13.17 P/E Ratio.
Now, let’s take the estimated forward earnings estimate for the Index which Crossing Wall Street recently estimated at $112.49 for 2013.
I have provided a link below to reference this information.
If we take the P/E Ratio and multiply this by estimated earnings then we arrive at a valuation. This works out to be 1481. With the Index’s Friday market close of 1513 then we can determine if the Index is trading above, or below, an estimated fair value. In this case it appears the Index is trading above fair value by about 2.2% using this valuation method.
Now let’s check in Morningstar’s Fair Market Value Fair Value Graph and see if we are close to what it is showing. I have linked it below for your easy reference.
Comments
edited to add, speaking of:
Saturday, January 26, 3:54 PM ET
"Apple's (AAPL) glory days are now behind it," said FBN's Shebly Seyrafi on Thursday morning with the stock at $450. ***On Sept. 13 - the day after the iPhone 5 launch and the shares at $680 - Seyrafi reiterated a Buy rating and boosted his price target to $1,000***. (FBN now maintains an Outperform on Apple with a lowered target of $650.)
http://seekingalpha.com/currents/post/784471
No debate from me this ... I use Morningstar's Market Valuation Grpah myself as one of my tools concerning valuation. I think they do a pretty good job. I also use it as an aid in when are the better times to load equity ballast and when to off-load so to speak.
Indeed, I have found it to be a neat little tool for the individual investor, like myself.
Thanks for sharring.
Skeeter
Charles and Skeeter, I agree with your position and I sense that the S&P 500 will end up on the year the way it's looking now. Currently I think it may take out the 1525 level but do note that we have had 8 up days in a row which doesn't happen all that often. That leads me to be cautious about a move down before we march upward. There's also been indications that the little investors have started moving back in to the market which hasn't been a good sign lately. Like Skeeter I have been accumulating cash lately instead of putting it to work and may consider taking even more profits if we jump higher. Mr. Market will tell me what to do and when.
All-time high...14,166 in 2007.
You've just got to believe!
Baaaaaaaaaahhhhhhhhhhh!!!!!!!!!
I'm searching M* and not finding anything.
Cheers.
D.S.
Subtract about 10% for inflation between the highs and we get closer to a REAL price.
http://www.zerohedge.com/news/2013-02-01/kyle-bass-tells-nominal-stock-market-cheerleaders-remember-zimbabwe
Thinks stocks will move higher. Recommends productive assets - oil wells, apartments, global productive businesses, etc.
I do hope some of my fund managers pick up some AAPL at these levels. It may not bounce tomorrow but it is a moderately valued stock of a profitable growth company.
I also think there's a big future in IPad/IPod as retail terminals (you're already seeing that at some chains like Nordstrom Rack and Finish Line), but I think you could invest in the point of sale companies for that (Ingenico, Verifone, NCR, etc.) as well as Apple.
Kiosks are another possibility for IPads. See:
If Apple isn't going to bring out any new products anytime soon, I do think there's new avenues for current products.
http://www.cnbc.com/id/44788851/Kyle_Bass039s_Nickel_Collection
I thought I take a moment and use the World’s Most Simplest way to compute a stocks valuation that recently appeared in the Crossing Wall Street Blog; and, I will apply this formula to the S&P 500 Index itself.
In review, the formula is as follows: Growth Rate/2 + 8 = P/E Ratio
I have provided a link to the formula for those that would like to read more on it.
http://www.crossingwallstreet.com/archives/2012/05/worlds-simplest-stock-valuation-measure.html
In review of Moringstar’s Instant Xray I will use its projected five year earnings per share growth rate for the S&P 500 Index which was currently listed at 10.33 as of 02/02/2013.
I have provided a link to reference this report.
http://portfolio.morningstar.com/NewPort/Free/InstantXRayDEntry.aspx?entrynum=10&runMode=MSTAR
Simply enter a ticker symbol on the entry page ... I used SPY and an amount. Then click view Xray Report. On page two you will find what the current earnings growth rate is for the S&P 500 Index.
If we take the 10.33 growth rate number and divide by 2 and then add 8 by the formula this computes to a 13.17 P/E Ratio.
Now, let’s take the estimated forward earnings estimate for the Index which Crossing Wall Street recently estimated at $112.49 for 2013.
I have provided a link below to reference this information.
http://www.crossingwallstreet.com/archives/2013/01/earnings-season-numbers.html
If we take the P/E Ratio and multiply this by estimated earnings then we arrive at a valuation. This works out to be 1481. With the Index’s Friday market close of 1513 then we can determine if the Index is trading above, or below, an estimated fair value. In this case it appears the Index is trading above fair value by about 2.2% using this valuation method.
Now let’s check in Morningstar’s Fair Market Value Fair Value Graph and see if we are close to what it is showing. I have linked it below for your easy reference.
http://www.morningstar.com/cover/market-fair-value-graph.aspx
Bingo ... They are currently both reporting that stocks are trading about two percent above fair value.
I hope this gives you some insight as to one of the ways I use to compute an estimated fair valuation for the Index.
Have a great day … and, I wish all “Good Investing.”
Skeeter