Evil Woodpecker: "Predictions from 9/25
1. Washington Mutual will fail this Friday.
2. The Fed will lower rates by 50 basis points BEFORE their next meeting.
3. Current stock market rally is a dead cat bounce. Look for the Dow to sink to 8,700 points in the next 12 months. Expect further dead cat bounce after rate reductions, then much deeper declines as investors lose confidence in government to manage the problems in the finance industry."
Well... my first 3 predictions came true. Sort of. I should have points deducted from my final score for guessing that it would take 12 months for the Dow to get down to 8,700 points. I also guessed that when the Dow got down around this point, it would mark the beginning of the recovery. Timing the end of a bear market, kind of like catching daggers... which is why I am not a day trader.
I would guess that the Dow is now trading at pretty low trailing P/E, historically. As of September 30, it was 15.68 when the DJIA was at 10,850.
So unless these companies have disastrous earnings, that ratio should be much lower.
It kind of hints at indiscriminate selling, which is a good thing if you still have decades left to figure out retirement. It's basically your favorite stocks going on sale.
