PDA

View Full Version : Is the US stock market becoming undervalued?


Jae Onasi
02-20-2009, 09:09 PM
With the Dow having dropped so far in the last few months, has it now become undervalued? Or does it warrant further correction (if it can even be called that anymore)? Is it in line with the value of many of the companies?

Yar-El
02-20-2009, 09:14 PM
With the Dow having dropped so far in the last few months, has it now become undervalued? Or does it warrant further correction (if it can even be called that anymore)? Is it in line with the value of many of the companies?
Yes. It is also rumored in being done on purpose.

jrrtoken
02-20-2009, 09:31 PM
Not a really surprising thing. I'm guessing in a few weeks it will rise again, as it usually does.
Yes. It is also rumored in being done on purpose.If this is about You Know Who.....

Jae Onasi
02-20-2009, 09:32 PM
I have not heard that allegation. Would you care to share with the rest of us on where such information might be found?

Yar-El
02-20-2009, 09:43 PM
I was listening to NBR news, and then there was a follow up on another station. Do you remember when Obama threatened to tax anyone making over $250,000 a year? Many investors and buisness owners decided to prepare for the storm, so they are holding the stock market at low levels on purpose. They are worried about the promises made by Obama on sharing the wealth; thus, companies choose to layoff people to send a message. You don't threaten the hands that feed you. China is holding onto around 5 to 6 trillion ready for investing, but they choose to follow their American counterparts. Everyone is worried about what Obama has threatened to do, so they are holding the stock market hostage. Thats what I heard. I don't know if it is true.

Someone else did a measure and traced a sell off trend starting on the exact day of when Obama was elected. It also tank $300,000 points on the day he was sworn into office. An investor said we won't see the market turn around for at least two to five years. Watch - Everytime Obama or his team talks, the stock market goes lower.

jrrtoken
02-20-2009, 09:50 PM
You don't threaten the hands that feed you.I'd rather have the government control the corporations rather than the corporations control the government.
Everyone is worried about what Obama has threatened to do, so they are holding the stock market hostage.Actually, I'm happy about what he's doing. I'm sure the billionaires are freaking out cuz they won't be able to afford anymore European sex slaves.
Thats what I heard. I don't know if it is true.So, it's really just a speculative theory, right?

Yar-El
02-20-2009, 09:52 PM
I'd rather have the government control the corporations rather than the corporations control the government.
Actually, I'm happy about what he's doing. I'm sure the billionaires are freaking out cuz they won't be able to afford anymore European sex slaves.
So, it's really just a speculative theory, right?
The only problem with your thinking is - You don't push companies around, or they will all take off. No one will want to take the risk in owning a buisness; thus, there will be no more jobs in the US. They will all open overseas.

No job, no money, no food.

So, it's really just a speculative theory, right?
I don't know. We will have to wait and see. Actual conversations were talked about during the interview.

Jae Onasi
02-20-2009, 09:54 PM
The sell-off started in September, well before Obama got elected--McCain was ahead in the polls at that point. One of the reasons Obama got elected was because the Dow tanked, and people decided that McCain's policies weren't going to work to fix it. The statement that the Dow sell-off began the day Obama got elected is incorrect.

jrrtoken
02-20-2009, 09:56 PM
The only problem with your thinking is - You don't push companies around, or they will all take off.So we should allow the corporations to create thier own standards and regulations, and just stand idly by? Who knows what the corporations could do if they had that amount of unrestricted power; no more unions, 18-hour days, child labor, etc. would all be most likely put into place.

By allowing the economy to "fix itself", i.e., do nothing, it will only send the world into a state of financial ruin. Hoover's inaction during the Great Depression led to farther hardships.

Yar-El
02-20-2009, 09:56 PM
The sell-off started in September, well before Obama got elected--McCain was ahead in the polls at that point. One of the reasons Obama got elected was because the Dow tanked, and people decided that McCain's policies weren't going to work to fix it. The statement that the Dow sell-off began the day Obama got elected is incorrect.
You miss my wording, or I wasn't clear enough. The major stock drops started when Obama was elected.

So we should allow the corporations to create thier own standards and regulations, and just stand idly by? Who knows what the corporations could do if they had that amount of unrestricted power; no more unions, 18-hour days, child labor, etc. would all be most likely put into place.

By allowing the economy to "fix itself", i.e., do nothing, it will only send the world into a state of financial ruin. Hoover's inaction during the Great Depression led to farther hardships.
Several investors have said they don't know what the stock market will do if left alone.

mimartin
02-20-2009, 10:27 PM
If any “so-called” expert knew what the market was going to do they would not be blabbing about it in the media. They would invest their money and then set back and watch the money roll in.

Yes, the market is self-correcting. If we do nothing it will correct itself eventually. That is not going to help people losing their jobs, retirement, homes and medical coverage.

With the Dow having dropped so far in the last few months, has it now become undervalued? I’d say yes and no. ;) I’m sure some stocks are very undervalued at the moment. I’m also sure there are some stocks that are still overvalued and require further corrections. Being able to evaluate the difference between the two decides if you make money or lose money in the market.

I will have to agree with Yar-El to a certain minor degree, but perhaps not for the same reason. Uncertainty is a driving force in the markets and Obama’s vision of the future breeds uncertainty among investors. However, I completely disagree with the idea that the market could be manipulated to such a degree. I also disagree with companies and investors losing money on purpose. That makes no logical or business sence and any CEO that would do it would soon be looking for another job. They don’t keep their jobs by making political points, their only concern is making the stockholders money.

Jae Onasi
02-20-2009, 10:57 PM
You miss my wording, or I wasn't clear enough. The major stock drops started when Obama was elected.
I did not miss your wording at all. You said this:
Someone else did a measure and traced a sell off trend starting on the exact day of when Obama was elected
Your allegation was that the sell off trend started when Obama was elected. The sell-off trend began in September.

Tommycat
02-20-2009, 11:23 PM
Actually I think it has more to do with the fact that the markets do not like uncertainty. They did not like when W was president and Congress was Republican held. The more fighting there is between the pres and congress the more they like it. It means less gets done. It means there is less volitility in the laws and regulation. With one party in control of both houses of congress and the presidency, the fear is that they can get more done. Getting more done makes investors a little jumpy.

Web Rider
02-21-2009, 03:54 AM
I think that the modern Stock Market really is a bad idea from the beginning. It takes control of companies and puts them in the hands who have no concern for the company, the workers or the product, but only with making greater profits. And that has exacerbated the situation with seeking near-slave labor in other nations, wanton abuse of the environment and reduction of quality all in making money for people who have no real interest in the well-being of the company.

It enables the rich to get richer, the poor to get poorer and companies are forced to extract quality and rights and workmanship from their business to make more money for people who don't give a damn about anything but more money.

mur'phon
02-21-2009, 08:52 AM
You forgott to mention that it helps generate fantastic growth and inovation.:D
Anyway, do you you have an alternative system you'd like seen put to practise?

Web Rider
02-21-2009, 05:32 PM
You forgott to mention that it helps generate fantastic growth and inovation.:D
Anyway, do you you have an alternative system you'd like seen put to practise?

I'm not against the system, I'm against the way it's used and the mindset people have in it. Treating companies like their job is to make you money and not make a good affordable product and take care of their employees is one of the things that is destroying American companies.

And "fantastic growth" is what our economy doesn't need. It needs stable, reliable growth, not 20 years of growth followed by 5 years of depression. Innovation is produced by competition, not the stock market.

mur'phon
02-22-2009, 06:39 AM
Treating companies like their job is to make you money and not make a good affordable product and take care of their employees is one of the things that is destroying American companies.

It's how almost every private company works, why isn't it destroying them? If the goal of a company is not to make money, how will they compete with eachother?

And "fantastic growth" is what our economy doesn't need. It needs stable, reliable growth, not 20 years of growth followed by 5 years of depression.

And how do you intend to achieve that?

Innovation is produced by competition, not the stock market.

True, but the stockmarket is wonderfull for providing the capitall needed to put innovation to use.

Web Rider
02-22-2009, 07:57 PM
It's how almost every private company works, why isn't it destroying them? If the goal of a company is not to make money, how will they compete with eachother?
It is. Like the stock market, most private companies that live only to make money will do so, they will build, and rise, and grow and make profits, and then crash hard and fast. It may take 20 years, but making absurd profits at the expense of labor and quality will always do this. Labor eventually gets sick of it, and consumers switch in a heartbeat when something better comes along.

I'm not saying companies shouldn't make money, they should. I'm just saying that they shouldn't be sacrificing labor and quality to do so.

And how do you intend to achieve that?
Ideally, by having the people who run companies pay their employees enough to afford the products they're producing. It's a mindset change and that's the hardest of them al.

True, but the stockmarket is wonderfull for providing the capitall needed to put innovation to use.
The stock market inflates the value of certain goods through making them appear profitable to people who are uninvested in the system. It provides ONLY financial capital, nothing more.

mur'phon
02-23-2009, 05:43 AM
Ideally, by having the people who run companies pay their employees enough to afford the products they're producing. It's a mindset change and that's the hardest of them al.

I think that vision is unrealistic as long as there are no incentives for bosses to do so. I have yet to see people do things not to their own benefit, and unless they start valuing the good feeling of paying their employees more than the cost of doing so (which I have little hope will happen), I don't see how things will change. The fact that the market would punish companies who didn't aim to maximize profit makes the scenario even less likely.

It provides ONLY financial capital, nothing more.

Which is still very much needed (I asume you where talking about how the stockmarket helps innovation, if you meant in general, I disagree).

Web Rider
02-23-2009, 06:58 PM
I think that vision is unrealistic as long as there are no incentives for bosses to do so. I have yet to see people do things not to their own benefit, and unless they start valuing the good feeling of paying their employees more than the cost of doing so (which I have little hope will happen), I don't see how things will change. The fact that the market would punish companies who didn't aim to maximize profit makes the scenario even less likely.
It's not, up till the 60's that's what most companies did. If you pay your workers enough so that they can afford your product, it essentially means they're paying themselves. You don't have to pay them enough to buy a new one every day, but when a person feels they can afford what they're making, they're going to be happier about making it.

Darth Avlectus
02-27-2009, 02:03 AM
If any ďso-calledĒ expert knew what the market was going to do they would not be blabbing about it in the media. They would invest their money and then set back and watch the money roll in.
Mmm, yes and no...expert in it for himself, yes. Knows whaen to walk away, yes.

For the economy, not so much...any economist knows that to horde or put $$$ in a bank acct causes circulation to stop...Investing is obviously different as ther is some form of liability and risk and such...what do you think has been happening lately? :)

Yes, the market is self-correcting. If we do nothing it will correct itself eventually. That is not going to help people losing their jobs, retirement, homes and medical coverage. [quote] TRue but what it does do is let the wound bleed out and flood out the undesirable 'contaminants' and 'infections'.

Now if we got into material/equipment or other physical property investment...I don't know enough to tell you much there. I'd actually invite enlightenment here.

[quote] Iíd say yes and no. ;) Iím sure some stocks are very undervalued at the moment. Iím also sure there are some stocks that are still overvalued and require further corrections. Being able to evaluate the difference between the two decides if you make money or lose money in the market.

[Warning]: if you draw another +/-1 card, I will be forced to enact assassination protocols.

I will have to agree with Yar-El to a certain minor degree, but perhaps not for the same reason. Uncertainty is a driving force in the markets and Obamaís vision of the future breeds uncertainty among investors. Because most average people cannot detach themselves emotionally to intellectually analyze what goes on and why. Hint: It's always either good or bad with these folks depending upon the current trend

However, I completely disagree with the idea that the market could be manipulated to such a degree. I also disagree with companies and investors losing money on purpose.[quote]

True suddenly taking off with a significant chunk of $$$ would be delayed in its effect. Take too much and you'll be sorry, when it suddenly halts and fingers all point at you.

Still, the company recently pillaged would have a wobbling teetering effect in its performance until it needed a bailout or it crashed.
That and they are already so filthy rich they can take $$ and run--and cover their tracks.

[quote] That makes no logical or business sence and any CEO that would do it would soon be looking for another job. They donít keep their jobs by making political points, their only concern is making the stockholders money.

Oh? Then how do you explain the gold market? I see gold at a rather low price right now. Now is a good time to "buy". However, unless you actually have the real physical thing in your hands, it is just numbers on paper.
As well I see all those commercials advertising to "buy your gold now 'cuz YOU need the ca$h now". Clever in these hard times. Once these companies have all the physical product they can get (within reason...probably on a margin of diminishing returns :xp:), they will jack up the price and sell again.

I could be wrong about it as it may not overlap w.r.t. investments and performance as it is for just running a business, BUT:
Is it not also possible to run at a loss for a period to shave off competition?
That is a little incentive...albeit not great incentive but enough if it will make business easier and less competitve so you own the majority of business in a market. It's illegal, yes, but that didn't stop some.

I'm not against the system, I'm against the way it's used and the mindset people have in it. Treating companies like their job is to make you money and not make a good affordable product and take care of their employees is one of the things that is destroying American companies.
Hmm. I do seem to recall that it was once said "without personal integrity and responsibility, it falls apart". It was a prominent economist who said it if I do recall correctly.

You'd need to be one for true meritocracy if you are to make sense of the horribly misplaced logic in this nation.;)

And "fantastic growth" is what our economy doesn't need. It needs stable, reliable growth, not 20 years of growth followed by 5 years of depression. Innovation is produced by competition, not the stock market.

True, sorta. Still, government fails for the same reason free market enterprise can. Human nature. Managing, financing, planning, governing, regulating. I'm just not sure of any real way to go about this that would continue to last. :(

It is. Like the stock market, most private companies that live only to make money will do so, they will build, and rise, and grow and make profits, and then crash hard and fast. It may take 20 years, but making absurd profits at the expense of labor and quality will always do this. Labor eventually gets sick of it, and consumers switch in a heartbeat when something better comes along.

I'm not saying companies shouldn't make money, they should. I'm just saying that they shouldn't be sacrificing labor and quality to do so.

Well, also clients can be fickle in a market championing freedom of choice. I'm sure that plays in as a factor. (Just something to consider! ;)) I may have a little here that I can share in terms of personal experience, though I am not sure how relevant it is overall. The main thing I'd wish to convey is how sometimes consumers are not loyal and thus depending upon them is a very precarious proposition for surviving. ...If you'd care to hear it.

True that companies which do this kind of unethical behavior continuously will inevitably crash hard. You reap what you sew. These are also the type I'd consider to undercut more honest companies.

Also, why are we relegating this to just producers? Why not service providers? I am sure everyone here has a story or two about that.
If not, I would recommend listening to Clark Howard on "Customer NO-Service".

Ideally, by having the people who run companies pay their employees enough to afford the products they're producing. It's a mindset change and that's the hardest of them al. True, however when larger competitors have a greedy mindset, it does both set a bad example and it sets in a hostile environment that one quickly realizes survival by means of underhanded competitive methods may be necessary to remain.

That's how it all gets botched, sadly. Someone gets ahead and starts turning the stakes reeeeeal nasty.

The stock market inflates the value of certain goods through making them appear profitable to people who are uninvested in the system. It provides ONLY financial capital, nothing more.

Ah. I knew there was a reason I stayed the hell away from it. :D

I think that vision is unrealistic as long as there are no incentives for bosses to do so. I have yet to see people do things not to their own benefit, and unless they start valuing the good feeling of paying their employees more than the cost of doing so (which I have little hope will happen), I don't see how things will change. The fact that the market would punish companies who didn't aim to maximize profit makes the scenario even less likely. Sad, isn't it?

Good point, though. As long as it appears there is no real incentive to build trust in employees and consumers, also, they will continuously 'push the envelope' in any way they can, only to straighten up their act to try again down the road. You can throw all the rules and regulations you want at these people, but that will not stop them from taking advantage if they ever see openings of any kind. Skimping, ripping off longtime loyal customers, bribing (though this works only if the one on the other end actually takes the bribe), exploiting employees or hiring illegals who can't lodge complaints and keeping as many of those as possible to undercut business and avoid costs and taxes.

It's not, up till the 60's that's what most companies did. If you pay your workers enough so that they can afford your product, it essentially means they're paying themselves. You don't have to pay them enough to buy a new one every day, but when a person feels they can afford what they're making, they're going to be happier about making it.

Change is bad. Especially like this. While you points that doing the right thing actually shows through time (just ask Smuckers Jam company)...it is rare that it will catch on and gain any kind of traction--we live in turbulent and greedy times.

In other markets where consumers are fickle, what ends up being the case is that you must be as slippery as them if not more-so if you want to catch their business. Case in point: The current VG Console wars. Many just simply got a Wii or a Xbox360 because they wanted a new game system, yet could not afford the cost of a PS3 (or just would not pay that much).

The obvious rebuttle for the competitors of PS3 was that since theirs was a superior system (capability potential wise), was for them to keep on making it comfortable for the game producer companies to make titles. Game 'library' is what lures customers eventually I noticed. Make your minimal level systems adequate but affordable, and provide the games.

However, they all seem to nickel and dime you to death with accessories and unlockable content, and as is becoming a new trend, online service w/ the console. I still think home computers will continue to have the edge here though.

Jae Onasi
03-02-2009, 02:27 PM
The Dow is down to 6808 as of this time--lowest point since '97. Whew.

mimartin
03-02-2009, 03:15 PM
Mmm, yes and no...expert in it for himself, yes. Knows when to walk away, yes. Just no. An expert does not know when to get out. They may make an educated guess when to get in or when to leave, but it is still a guess.

There is this huge formula for deciding if a stock is overvalued or undervalued. It looks like a sound mathematical formula until you realized that past growth is not an indication of future growth. When you do that you realized the entire formula is based on a guess. Financial advisors can dress it up and make it look appealing, but it is still just someoneís best guess. For the economy, not so much...any economist knows that to horde or put $$$ in a bank acct causes circulation to stop...Investing is obviously different as ther is some form of liability and risk and such...what do you think has been happening lately? :) The experts I was speaking of was financial advisors. Economist is a great profession, but it is very different than someone that makes their money in the stock market. For what it worth, I am a financial advisor although I only practice on myself since I donít want the responsibility of dealing with others retirements. Iím not following the Economist advice right now, I am hording my cash, but only to purchase stocks when I believe they are close to bottom. Still it is just a guess on my part when that will be. True but what it does do is let the wound bleed out and flood out the undesirable 'contaminants' and 'infections'. Donít understand your point. I believe that is what I wrote. Because most average people cannot detach themselves emotionally to intellectually analyze what goes on and why. Hint: It's always either good or bad with these folks depending upon the current trend Good or Bad? I donít understand your point. If people knew the future then they would know how to invest. It would not matter if that future was good or bad. The problem with the market is uncertainty leads to speculation and fluctuations. Since I am a long-term investor and far from retirement I usually pay little attention to the market on a daily basic. However, now I am watching it closely. Not in an attempt to get out, but watching for the right time to buy. Oh? Then how do you explain the gold market? I see gold at a rather low price right now. Now is a good time to "buy". However, unless you actually have the real physical thing in your hands, it is just numbers on paper. Which is safer, $100,000. in the bank or $100,000. in your pocket? The number on a sheet of paper is fine as long as you purchase it from a ligament source (the problem today with the lack of oversight is knowing what is a ligament source). The gold is safer stored in a vault than under your bed (at least in my neighborhood). Oh, my thought on gold is it is never a good time to buy.

Darth Avlectus
03-12-2009, 04:46 PM
My appologies, somehow I completely forgot about this thread.

Just no. An expert does not know when to get out. They may make an educated guess when to get in or when to leave, but it is still a guess.
Conceded. --Though I will say I have met and worked for the types with very good instincts about these things. Some of them, clean and shiny...some of them ~ehh...some of them just downright scare the living crap outta me.

It would not surprise me if all of the above had a few skeletons in their closets like politicians. :rolleyes:


There is this huge formula for deciding if a stock is overvalued or undervalued. It looks like a sound mathematical formula until you realized that past growth is not an indication of future growth.
Nah, really? I hadn't guessed. :lol:
When you do that you realized the entire formula is based on a guess.
:argh:
Financial advisors can dress it up and make it look appealing, but it is still just someoneís best guess. Well, social sciences are not like lab sciences...something to do with ceterus paribus (latin for all others assumed equal probably regarding parameters). So I agree.

The experts I was speaking of was financial advisors. Economist is a great profession, but it is very different than someone that makes their money in the stock market. For what it worth, I am a financial advisor although I only practice on myself since I donít want the responsibility of dealing with others retirements. Iím not following the Economist advice right now, I am hording my cash, but only to purchase stocks when I believe they are close to bottom.

I hope it is in commodoties or something like that which you have a good sound reason that it will pick up again; everyone uses it and there will always be a need. Or some trend which will only continue to grow.

I wish my parents had listened to me with MY $$$ they had saved up since I was a kid...instead of having to pay back $2K in little chunks to my bills or whatnot.

How is that working for you BTW, as a financial advisor? Do you think you are at least a little better informed as to try to make an educated guess at the right moment? --I always thought it more confusing than worth it to be honest. Now I am not so sure about that, seeing as how common sense told me the bubble was going to pop as it has now.

Still it is just a guess on my part when that will be. Donít understand your point. I believe that is what I wrote. Oh, I was more or less agreeing with you.

And stating the grim reality that doing nothing will let those delinquent people who have defaulted etc. face the music. It's kind of a brutal solution, yes...but honestly I think people should have to pay the price for living too far beyond their means. Just my opinion, though. Say la'vie. We're bailing out all those banks and people, anyway. So my opinion is irrelevant, I guess.

Good or Bad? I donít understand your point.

Uneducated, fair weathered folks who decide good day or month necessarily = good economy. ;)

Those who have only bothered to watch cnbc and not become legitimately educated, like yourself kind sir. ;) Though I have some economics, I am only able to generally guess at least what will happen next. I am not in your league, though.


If people knew the future then they would know how to invest. It would not matter if that future was good or bad. Ohh?...but it wouldn't be as fun that way. :lol:
The problem with the market is uncertainty leads to speculation and fluctuations. Since I am a long-term investor and far from retirement I usually pay little attention to the market on a daily basic. However, now I am watching it closely. Not in an attempt to get out, but watching for the right time to buy.

THAT is a smart man. Pretty much what I figured when I was 14. Long term is what really matters.

I only watch Jim Cramer for the entertainment aspect of it.

Day to day-whew! No thanks. :)


Which is safer, $100,000. in the bank or $100,000. in your pocket? The number on a sheet of paper is fine as long as you purchase it from a ligament source (the problem today with the lack of oversight is knowing what is a ligament source). Uh-huh. I sort of get you... Could you perhaps elaborate on what a ligament source is in general? I think I get where you are coming from, and even have found a few places regarding gold and that. I want to be sure, though.


The gold is safer stored in a vault than under your bed (at least in my neighborhood). Oh, my thought on gold is it is never a good time to buy.
But it's lower than its ever been? :confused: Is that not a good time to get as much as possible before it rises again??? I don't know what you mean.

True, although I would have disagreed while living with my parents.

My current neighborhood, not too bad. True, I barely even trust my neighborhood as it is with the computer I own, which btw I am currently using right now to interact on this forum with you. So $100 grand in gold nuggets....nonono!

Thusly, I concede to you again kind sir.:lol:

Jae Onasi
03-12-2009, 07:08 PM
Gold is at a fairly high price right now compared to what it was even last summer.

mimartin
03-13-2009, 07:08 PM
Could you perhaps elaborate on what a ligament source is in general? That is the million dollar question anymore. If someone is offering you something too good to be true, then that is not a ligament source. There was a financial advisor around here (http://houston.fbi.gov/dojpressrel/pressrel08/ho01172008.htm)that guaranteed 15% return on your investment. If it sounds too good to be true, it usually is too good to be true. It did not work out for those that invested with him as he defrauded investors of an estimated 10 million.

My suggestion would be make your own trades or be very skeptical of anyone. Make them do everything by the book, demand account statement and perspectives. If they are legitimate they will have no problem with this. Read everything and if anything looks suspicious report it to the proper state and Federal agencies. I assure you I do not get upset when someone requests another copy of their insurance policy or their account breakdown and neither should a financial advisor. Ask questions and make sure they are answered to your complete satisfaction.

If the person is demonstrates unethical behavior (Investing someone in long-term investments when short-term investment fit their goal) then find someone else, because it can be a sign of deeper problems. I went to high school with the guy that milked my friends and family for 10 million. I went to invest with him, but upon seeing that he put a friend in College into long-term bonds and her elderly grandparents into the stock market, I walked away keeping my money. Both were examples of unethical behavior, I also warned them, but they did not believe me at the time. By the time they believed me it was too late.

As to gold, I never believe it is a good time to invest in gold. My stepfather on the other hand disagrees, but my portfolio is stronger than his. :D