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So the Stock Market Is Back UP To Where It Was Before the Crash.
Total Honesty All The Time
Registered User
User ID: 98643
10-09-2012 03:54 PM

Posts: 5,839



Post: #1
So the Stock Market Is Back UP To Where It Was Before the Crash.
You can see that here:
http://www.google.com/finance?q=INDEXDJX...lient=news

What most people do not know is that average earnings are not where they were before the Crash.

That means that most Stocks are overvalued compared to previous valuation.

That does not necessarily mean anything for the simple reason that Stock Valuation, just like commodity prices are "What Ever People Are Willing To Pay." Remember the Tech Stock valuations? You can easily see what all of the hyping of Gold can do. As long as there are fools out there, they will buy Gold, Silver and Platinum as investments. Those that buy at lower prices when hype was not ON, see profits. Those who buy at the top of the hype have seen their "investment" cut in half, but if they wait long enough the shysters and hypesters will drive the price of gold back up again and the former losers can get out and let some other fool take the ride back down.

Years ago, when I was a boy, the price of a stock compared to the Earnings of a company would be ten to twelve times earnings. Then it went to Thirty times Earnings. If it was in a growing industry it might even shoot up to Forty times Earnings.

Then in the 1990's people stopped paying attention to price to earnings and started listening to the hucksters, hypesters and shysters on Wall Street and stocks soared to hundred times earnings in price. Some stocks never had any earnings but soared daily in price.

IT IS ALL ABOUT WHAT YOU ARE WILLING TO PAY. IF ENOUGH PEOPLE ARE WILLING TO PAY MORE, THEN THE PRICE WILL GO UP. THE EARNINGS MAY NOT GO UP, BUT THE PRICE WILL. IF YOU GET OUT BEFORE THE NEXT CRASH, THEN YOU HAVE DONE WELL.

So where is the money coming from to drive the stock prices up? Simple, workers investing in their 401K's and IRA's or whatever they are called now. Also, Banks that borrowed from the FED at almost no interest to buy into companies have made a lot of money from those purchases. What a darn good deal, the banks can borrow, see the stock price double, sell and give half of that back to the FED and further invest the rest. The FED has promised to keep interest rates low, so the banks are still buying and holding right now.

Now, here is the question....... What will happen when the FED starts charging interest on those ZERO interest loans that have been used to move stock prices up? Will there be a Bank stampede to the exits and another market crash? A lot of people know that prices are artificially high, and many of them are prepared to cash out of stocks. It will be interesting to see what happens when Interest rates go up. Hopefully, they will go up very, very, very, slowly so as to not cause a panic.

Republiscams = Republic Scammers = Criminals who scam the government for personal financial gain. = Traitors Murderers, Liars, Thieves!

They are Fat Cat Industrialists, Bankers and Politicians OF ANY PARTY OR NONE who've taken over our country for the practice of their religion which is the worship of money and the massive accumulation of same.
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Total Honesty All The Time
Registered User
User ID: 98643
10-12-2012 05:09 AM

Posts: 5,839



Post: #2
RE: So the Stock Market Is Back UP To Where It Was Before the Crash.
It is all up to perspective. Some people are ignorant and others are on top of it all. Where are you????

Republiscams = Republic Scammers = Criminals who scam the government for personal financial gain. = Traitors Murderers, Liars, Thieves!

They are Fat Cat Industrialists, Bankers and Politicians OF ANY PARTY OR NONE who've taken over our country for the practice of their religion which is the worship of money and the massive accumulation of same.
Quote this message in a reply








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