Money Printing Is The New Mother’s Milk Of Stocks

By Michael Pento – Re-Blogged From Silver Phoenix

My friend Larry Kudlow always says that Profits are the mother’s milk of stocks. That used to be true when we had a real economy. But sadly, that is no longer factual because we now have a global equity market that is totally controlled by central banks. To prove this point, let’s look at the last few years of earnings. During the year 2018, the EPS growth for the S&P 500 was 20%; yet the S&P 500 Index was down 7% over that same time-frame.

Conversely, during 2019, the S&P 500 EPS growth was a dismal 1%; yet the Index surged by nearly 30%. What could possibly account for such a huge divergence between EPS growth and market performance? We need only to view Fed actions for the simple answer: it was the degree to which our central bank was willing to falsify asset prices.

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Stock Market Signals Are Flashing Red

By Michael Snyder – Re-Blogged From Freedom Outpost

So many top professionals in the financial industry are sounding the alarm about a coming stock market crash right now.  And there certainly have been rumblings in 2018 – not too long ago we had a three-day stretch that was called “the tech bloodbath”, and during that time Facebook had the worst day for a single company in stock market history.  But we haven’t seen the really big “crash” yet.  Many have been waiting for it to happen for several years, and some people out there are convinced that it is never going to come at all.  Of course, the truth is that we are in perhaps the largest stock market bubble that our nation has ever seen, and all other large stock market bubbles have always ended with a major price collapse.  So whether it happens immediately or it takes a little while longer, it is inevitable that stock prices will eventually return to their long-term averages.

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Corporate Earnings Fiction

By Wolf Richter – Re-Blogged From Wolf Street

The Biggest Sinners in the Dow.

All 30 companies in the Dow Jones Industrial Average have now reported earnings for the third quarter. As required, they reported these earnings under Generally Accepted Accounting Principles (GAAP). These standardized accounting rules are supposed to allow investors to compare the results of different companies. But that’s too harsh a fate for many of our corporate heroes, and so they proffer their own and much more pleasing accounting strategies – as expressed in “adjusted” earnings and “adjusted” earnings per share (EPS).

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Investing in Up or Down Markets

cropped-bob-shapiro.jpg   By Bob Shapiro

Stock prices can be analyzed in a number of ways, to determine whether they are high, low, or fairly priced.

The Price to Earnings Ratio (PE) takes the most recent price of the shares and divides it by the most recent earnings, usually for the last 12 months. This Trailing PE allows you to compare a company’s price today with its price last year or 5 years ago, on an apples to apples basis.

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