Tufffff call
ouch
Shorts are not held into perpetuity, because markets go up over time. 
Time to go back to school kid, even your trolling is weak!
Lol I was referencing your god awful market call. I actually skimmed this whole thread yesterday laughing at all of your doomsday analysis. For someone who touts such a high success rate for their forecasts, and likes to brag about results, you sure missed the mark on this one.
Again, we’d have to look at dates. I did a massively successful short from Summer to election, selling expensive covered puts in a sideways market. This sounds like that? And some Grexit/Brexit plays, I can’t remember them all.
is it time for pa to retire?
not proud enough yet
Already retired. But some VC guys called yesterday and want a model built, so I’m temporarily out of retirement. Re-retiring in March. BSD thug life.
#tryagain
All true statements. Sorry if that makes you feel inferior! 
Back on topic…
If the S&P were to fall to 20X P/E (true as reported earnings) that would be an index value of 2140 ($106.95 x 20). That’s still a high price, but would be more reasonable. Would be a 25% drop from the previous highs.
But the USG would come to the “rescue” if that happened…pump the bubble back up.
Why are you looking at trailing earnings, Alphie? It’s all about what’s up ahead (…seems painfully obvious, but I realize you’re not a Charterholder).
#CorporateTaxCuts
because he says trailing is the only reliable indicator that doesnt have the american pig dog liberal-corporate-capitalist elite BS turned on. are forward earnings estimates frequently rosey? sure but if you valued the market off trailing youd be under allocating to equities almost constantly due to it looking frothy & overvalued.
if youre surprised by a man who frequently tells everyone in earshot about his analytical capabilities, only to find out its rather ham-fisted in most cases - dont be. hes still of the belief that the liberal-corporate-nazis are about to implode due to the sheer willpower & mental prowess of Donald J Trump, so its not like his mind is one of the top on the internet.
both have pros and cons imo. but as long as you compare the years consistently then it doesnt matter imo. i prefer trailing for the consistency. forward estimates drop a lot as the date they were forecasting comes closer. so imo its less reliable.
he should at least adjust trailing earnings for corporate tax changes… i prefer to use trailing as forward is always bs but you still need to adjust here and there.
im not saying there isnt a place for trailing & you should certainly be comparing your estimates to actuals - but completely ignoring forward estimates is pretty silly as well
This has already been covered many times, forward earning are completely made up. Way high nearly every time. Because investment industry corporate employees, make shit up to pump the market (duh).
Right, I just do my own forward model, or rough calc it in my head…using “real” financial statement earnings as the starting point.
For tax cuts, of course the USG printing money and subsidizing corporate profits is going to jack earnings. This is part of the “new normal” of crazy valuations and made up earnings, beginning in the 80s. But I also put USG default into my model (the money doesn’t come from nowhere, need to model both sides of the transaction). Of course the corporate market pumpers (aka “analysts”) won’t be modeling that part of the equation.
it seems like arguing over the P/E ratio alone is not entirely appropriate because at least the debt levels of companies should be taken into account. I would much prefer to look at things in the EV/EBIT perspective or at least take that into account. There are many companies in the S&P 500 where debt is creeping up and thats concerning but not necessarily reflected in the P/E multiple
I view it in a backwards fundamentals way from the PE ratio. We are at 25x for the S&P (high). Tax rates have dropped from 35% to 21% (down 40% overall). If EBIT earnings were the same, next year’s post tax earnings should increase by about 20%.
PE is now *really* 20. Now let’s look at the discount rate. Risk free is 2.5% long term it’s been way higher. Let’s say the risk premium is 5%. And the long term treasury is 5.
We are discounting right now by .075 rather than .1
That’s another 25% haircut. Now bam - 15 PE ratio once you back out tax and discount rate changes. Returns right now suck - yes - but also not relative to what else also sucks. The market looks solid.
Im hoping it drops though. Rates will climb quickly on inflation and there should be a better discount. I don’t think it’s in the stars though and the fed is the complete driver.
yep debt big. i prefer ev/fcf. most bankstas prefer ev/ebitda