Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Are stocks a sucker’s bet?
Foxnews ^ | 1/28/2013 | Peter Morici

Posted on 01/28/2013 4:35:16 PM PST by PieterCasparzen

With corporate profits at record levels and stocks regaining the ground lost during the financial crisis, Wall Street anxiously anticipates the return of the individual investors to equity markets. It may be a long wait, because the little guy may have concluded stocks are a sucker’s bet.

Investors, as opposed to traders, buy stocks in companies whose profits they expect to rise. The conventional wisdom says stock prices will follow profits up, but over the last two business cycles, that simply has not happened.

In March 2000, the S&P 500 first closed above 1500. Since corporate profits are up 135 percent but stocks have made virtually no gain since over the last thirteen years.

Buying stocks does not seem to pay any more, because most of the increased value created by higher profits has been captured by hedge funds, electronic traders, private equity funds, aggressive M&A shops, and trading desks at investment banks, which have multiplied over the last two decades.

(Excerpt) Read more at foxnews.com ...


TOPICS: Business/Economy; Constitution/Conservatism; Crime/Corruption; Foreign Affairs
KEYWORDS: jcsbthinktank; privateenterprise
Navigation: use the links below to view more comments.
first previous 1-2021-36 last
To: grobdriver

You do realize that every previous “all-time high” has since been superseded?

P/E ratios are getting a bit pricey—around 16-18, depending on which index you’re looking at. That’s a bit higher than the historical average, but it’s nowhere near 40 or 400, as we’ve seen in previous bubbles.

I doubt I would get all in now if I were in cash, but I don’t think it’s time to head for the hills, either.


21 posted on 01/28/2013 6:41:36 PM PST by Choose Ye This Day (There's no shame in attacking a criminal's bean bag. -- Ron Swanson)
[ Post Reply | Private Reply | To 5 | View Replies]

To: Choose Ye This Day

Small Caps are overpriced. The P/E of the Russell 2000 is around 36.


22 posted on 01/28/2013 6:43:03 PM PST by Choose Ye This Day (There's no shame in attacking a criminal's bean bag. -- Ron Swanson)
[ Post Reply | Private Reply | To 21 | View Replies]

To: PieterCasparzen

Stocks are almost worth what they were years ago, a bad long term investment. The stock market is straight up gambling.


23 posted on 01/28/2013 7:10:27 PM PST by Mike Darancette (Soylent Green is Boomers)
[ Post Reply | Private Reply | To 1 | View Replies]

To: PieterCasparzen

I read not too long ago that 85% of ALL TRADES are between the 5 or so Too big to fail banks, there is very little with regards to the General Public or other institutions, which tells me it is a suckers game and they have been artificially pumping the market in an effort to Sucker the Public back in, so they can FLEECE US AGAIN.


24 posted on 01/28/2013 7:27:39 PM PST by eyeamok
[ Post Reply | Private Reply | To 1 | View Replies]

To: BenLurkin
Stocks a suckers bet for the small guy>??? The problem is that over the last 30 years the major players have figured out ways to extract wealth from the markets that do an end run around simple buying and trading stocks. Via private equity funds, via hedge funds, via high frequency trading which extracts a toll (part of a cent) from each conventional (slow witted) trade
25 posted on 01/28/2013 7:39:18 PM PST by dennisw (The first principle is to find out who you are then you can achieve anything -- Buddhist monk)
[ Post Reply | Private Reply | To 13 | View Replies]

To: PieterCasparzen
The degenerate douche traders will artificially pump up the value of their worthless paper and then head for the tall grass with real coin when the SHTF.
26 posted on 01/28/2013 7:46:01 PM PST by Rome2000 (THE WASHINGTONIANS AND UNIVERSAL SUFFRAGE ARE THE ENEMY -ROTATE THE CAPITAL AMONGST THE STATES)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Rome2000

I agree R2000, it is a game of what the perception is rather than reality.
Also, many are forced into places like the stock market because government keeps interest rates for bank accounts near zero so the interest on the national debt is less.

There is so much manipulation that unless you are in a rare crowd doing all the manipulating you are at risk of maybe losing it all.


27 posted on 01/28/2013 7:49:08 PM PST by A CA Guy ( God Bless America, God Bless and keep safe our fighting men and women.)
[ Post Reply | Private Reply | To 26 | View Replies]

To: PieterCasparzen

Are stocks a sucker’s bet?


No VOTING is...... i.e. massive voter fraud..


28 posted on 01/28/2013 8:46:39 PM PST by hosepipe (This propaganda has been edited to include some fully orbed hyperbole..)
[ Post Reply | Private Reply | To 1 | View Replies]

To: PieterCasparzen

Are stocks a sucker’s bet?


No VOTING is...... i.e. massive voter fraud..


29 posted on 01/28/2013 8:55:40 PM PST by hosepipe (This propaganda has been edited to include some fully orbed hyperbole..)
[ Post Reply | Private Reply | To 1 | View Replies]

To: GOPJ

Oh, I understand plenty. Some don’t seem to understand the present/future effects of capital expansion vs credit expansion and which one has been occurring during the last 20+ years.


30 posted on 01/28/2013 10:18:03 PM PST by yadent
[ Post Reply | Private Reply | To 20 | View Replies]

To: yadent

That’s high level stuff alright - so I’m right - you understand futures :) That said, I’m also concerned about credit expansion - creates waaaaay too much funny money.


31 posted on 01/29/2013 8:06:34 AM PST by GOPJ ( Revelation can be more perilous than Revolution. Vladimir Nabokov)
[ Post Reply | Private Reply | To 30 | View Replies]

To: Choose Ye This Day
You do realize that every previous “all-time high” has since been superseded?

Well yes, I would expect that in a normal world.
But in this economic climate? With this administration?
People I talk to can't explain why we're doing even this well right now, much less marching to new highs.

32 posted on 01/29/2013 5:17:30 PM PST by grobdriver (Sic semper tyrannis!)
[ Post Reply | Private Reply | To 21 | View Replies]

To: grobdriver

Corporations earnings are at an all-time high (in dollar value). That’s why the market is doing well at the moment.

Now, the question can be asked: why are corporations’ earnings so high? Is any of it due to government bailouts, stimulus, loans, etc? Some of it, yes. Much of it because the companies are still running very lean labor-wise and productivity is way,way up. They have learned to make do with much less. That leads to profits. Also, many of the MNC’s are making and selling products overseas.

The economy IS growing—very slowly, despite Obama’s best efforts to kill it. Of course, most of his Obamacare provisions have yet to go into effect, so we’ll have to see.


33 posted on 01/30/2013 6:09:22 AM PST by Choose Ye This Day (There's no shame in attacking a criminal's bean bag. -- Ron Swanson)
[ Post Reply | Private Reply | To 32 | View Replies]

To: Choose Ye This Day
Well thanks for that.
Perhaps it's time to dip my toes back in - partially - and see where this takes us.
34 posted on 01/30/2013 7:13:28 AM PST by grobdriver (Sic semper tyrannis!)
[ Post Reply | Private Reply | To 33 | View Replies]

To: PieterCasparzen

-——Buying stocks does not seem to pay any more, because most of the increased value created by higher profits has been captured by hedge funds, electronic traders, private equity funds, aggressive M&A shops, and trading desks at investment banks, which have multiplied over the last two decades.-——

That is a wordy sentence of hedged nonsense. One wonders if the Maryland professor took some days off to be part of OWS.


35 posted on 01/30/2013 7:24:34 AM PST by bert ((K.E. N.P. N.C. +12 .....The fairest Deduction to be reduced is the Standard Deduction)
[ Post Reply | Private Reply | To 1 | View Replies]

To: PieterCasparzen

stocks are propped up by tax payer bailouts, and stimulus to keep large banks from failing causing the feds to print monies that inflate our dollars causing more of them to be needed to buy the stocks of which they are selling to increase the market which they say is an indicator of a robust economy...

we are through the looking glass and here’s the reality...

milk has risen from 1.19 a gallon to 3.89 a gallon.

is it a good time to buy? either way, someone getting some teat.

teeman


36 posted on 01/30/2013 10:04:17 AM PST by teeman8r (Armageddon won't be pretty, but it's not like it's the end of the world.)
[ Post Reply | Private Reply | To 1 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-2021-36 last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson