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Notes to myself, possibly of interest to others.
-- Bill Northlich

Wednesday, January 19, 2011

Rosenberg Agrees with Yves

The Dow has now gained ground in each of the past seven weeks. The last time it did that was back in the week ending April 23, 2010. Ahem. A month later, it was down 1,200 points. You see, nothing lasts forever, not even a speculative bounce. The Shiller cyclically-adjusted P/E ratio has expanded for six months in a row and at 23.3x in January is now at its highest level in nearly three years. Sentiment is wildly bullish. The market is seriously overbought, and it is expensive on a “normalized” earnings basis.

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