Look at future cash flows….do you think 2010 will produce 75 dollars in earnings for the S&P?
By Daniel at 10 November, 2009, 12:28 am
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There’s no pricing power on the part of firms, only higher raw material costs. the higher we go, the more margin squeezes are going to happen. At the end of the day, it is future cash flows that drive the market… sentiment and technicals are short to medium term phenomena.
Market may rally higher, but no volume on up days and plenty on down days is a problem. Also, the more the dollar gets pounded, the less pronounced the rise in the equity markets are concerned. Even with a weakening dollar, commodities are starting to look winded.
Gold is on the front pages. Dollar shorting is very in vogue. The warnings of a weak economy are all around us, investors are choosing to ignore them. The downdraft will hit when no one expects it. Are we enjoying our Santa Claus rally a month early, maybe, maybe not. This whole thing is built on a house of cards, one that will eventually tumble.
Just my two cents….
- Uformula
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