richard5za wrote: ↑Wed Oct 14, 2020 9:11 amHigg and John, on the subject of math ability I recently had this conversation with a person who is a stock broker and financial advisor: I pointed out that S&P themselves were forecasting a decline in 2020 earnings on S&P 500 down to about $ 90 per share, before an assumed (hoped for) recovery. Therefore if a PE ratio of 15 was an indication of fair value, as it was roughly the long term average, then the S&P fair value index in these circumstances would be 1350. His reply was "impossible". There was no discussion on future earnings or other assumptions, just "impossible". He has university degrees in finance and other qualifications. This sort of "numerical logic avoidance" is very common. The question is whether the short coming is arithmetical in nature or some other issue? It might even be emotional over riding the arithmetic e.g. "those possible outcomes that I don't want to consider then I won't"
It might even be emotional over riding the arithmetic e.g. "those possible outcomes that I don't want to consider then I won't"Higgenbotham wrote: ↑Wed Jul 22, 2020 2:07 pmAnother case of
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
― Upton Sinclair
It's a bubble.
I think so.
Also, when the bulls feel something that is quite reasonable is impossible, that's how crashes can happen.
