[And so Daiei keeps stumbling along, introducing competitive pressures that shouldn't be there -- prices fall and the entire industry struggles.] Deflation, ... is companies that are losing money not going out of business. |
[Investors should keep that experience of 1999 and early 2000 in mind when looking at the model.] The model is not a market timing tool, ... Stocks could stay undervalued for a while. |
2005 was another very good year with a double-digit gain in corporate earnings. Quite a bit of that was related to the energy sector. Without it, the increase was about 7.7 percent. |
After rounding up all the usual bearish suspects to blame for the market's disappointing performance this year, I've narrowed the problem to the price of oil, ... Investors fear that higher energy costs must eventually depress earnings growth. |
After rounding up all the usual bearish suspects to blame for the market's disappointing performance this year, I've narrowed the problem to the price of oil. Investors fear that higher energy costs must eventually depress earnings growth. |
Because of competitive pressures, it is difficult to raise prices. Companies have to raise their productivity, which keeps inflation down. |
Early in 2004, I predicted that energy's share of the S&P 500's market capitalization would rise from just below 6% at that time to 15% before the end of the decade. In January, its market-cap share was up to 12.1%, while its share of earnings had risen to 9.1% from 6.0% in early 2004. |
Earnings are still going to grow as interest rates and inflation remain low. |
Earnings will recover and valuation multiples, which got crushed, will get back to where they were at the beginning of the year, |
Earnings will recover and valuation multiples, which got crushed, will get back to where they were at the beginning of the year. |
For two years, we've seen this tremendous increase in prices, yet the core inflation rate has stayed at 2.3 percent or less, and the only explanation for that is globalization means inflation is contained. |
I think the folks at the Fed would like to raise the federal funds rate as high as they can short of seriously depressing economic growth. They want to make sure they have plenty of room to ease next time they have to do so. |
If Y2K is a disaster it will be a global one, not a local one, |
It's been clear that the Fed concluded rates were too low, |
Nobody believed in the model when it said that stocks were 60 percent overvalued and nobody believes in it now, ... Valuation is like beauty -- it's in the eye of the beholder. |