When the S&P 500's dividend yield topped that on Treasurys for the first time since 1958, where were the headlines?
The economy is receding, but not as fast as the media tell you, with their headlines about layoffs and store closings. This combination of facts is bullish. I was far too bullish, however, in my Sept. 29 column. It referred to this period as a reverse bubble, where only the bad in everything is noticed. Indeed, the bad has been noticed--and incorporated into stock prices and credit default prices. Between that column's publication on Sept. 10 and when this one went to bed on Nov. 25, the MSCI World Index fell 31.5%.
The bearish headlines have gotten bolder, and the panic has gotten worse (notwithstanding the late-November rebound). So I'm even more bullish now. Stocks are an even better buy. The S&P 500 is going for 12 times earnings (after nonrecurring items) for the 12 months ending Oct. 31. This at a time when ten-year Treasurys yield only 3.08%.
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The economy is receding, but not as fast as the media tell you, with their headlines about layoffs and store closings. This combination of facts is bullish. I was far too bullish, however, in my Sept. 29 column. It referred to this period as a reverse bubble, where only the bad in everything is noticed. Indeed, the bad has been noticed--and incorporated into stock prices and credit default prices. Between that column's publication on Sept. 10 and when this one went to bed on Nov. 25, the MSCI World Index fell 31.5%.
The bearish headlines have gotten bolder, and the panic has gotten worse (notwithstanding the late-November rebound). So I'm even more bullish now. Stocks are an even better buy. The S&P 500 is going for 12 times earnings (after nonrecurring items) for the 12 months ending Oct. 31. This at a time when ten-year Treasurys yield only 3.08%.
Read the complete story
