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Monday, April 25, 2011

Moneytalk Show Review for April 24, 2011

Brinker Comment: The stock market has shown a tremendous come-back over the last 25 months. It is rather remarkable when you consider everything that has happened. The all-time closing high in the S&P 500 of 1565 occurred back in 2007. At today¹s closing price of 1337, the S&P 500 Index is 14.5% below its all-time high. However, you have earned 3.5% years of dividends during that time which tacks on another 7% to our return. Therefore, on a total return basis, the S&P 500 is only 7% down from its all-time high. And right now, the markets are doing very well. The Dow just recorded a new high for 2011 and the S&P 500 is just a hair away from its 2011 high.

Caller: This caller read an article suggesting that the S&P 500 price-earnings ratio was getting higher than historic levels and that the stock market was entering bubble territory. He asked Bob if now was a good time to sell his stock holdings. Bob was pretty emphatic in his response and said he takes a completely different view of earnings. Bob said that based on the work he does, using 2011 operating earnings estimates that he has a high level of confidence in at this point, he thinks the S&P 500 is trading below its historic average multiple. Bob said ...
Read the rest of the summary at Moneytalk Summaries - April 24, 2011

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