S&P 500 Profit Margin Collapses

This is due primarily to the massive write-downs in the financial system.  It is staggering nonetheless.

Comments

[psychodave]

I was particularly enamored of the way 4Q08 Operating Earnings estimates fell from 15 to 5 in the space of a month (mid Jan to Mid Feb).

It only took two more weeks for the estimates to fall from 5 to -0.5.

But there's a ray of hope. By 3/10, a mere week later, estimates rose from -0.56 to -0.10 so there's never been a better time to buy, or sell, stocks [chokes].

I don't think such extreme opacity deserves much more time or scrutiny, much less cash. I'm confident management had the real numbers by Jan 12th.

Sarbanes-Oxley was working more effectively back in 2003. As a result, I am more receptive to the senior security, as opposed to the junior security in a secondary market, than our gracious host Mr. T.

However, I'm an index fund investor.

On a long term chart of S&P 500 monthly averages, I drew a line thru the 3 points of 4/1942, 12/1974 and 7/1982 and extended it to today.

I'd be willing to buy some S&P 500 this June at 640, 650 this September, or 660 sometime between Thanksgiving or Xmas.

It's definitely not the bottom, the S&P 500 could still drop all the way to 450. However, these are unambiguous lows.

notes: R^2=0.999992. I know, it's only 3 points. I was only going to use two, to get the 100% R^2 but my wife put her foot down, so thank her.

Appreciation roughly 6.775%/year.