Does this rally signal the bottom?
A cute one-liner to end the last night’s SNL:Weekend Update is surprisingly apt. Last week marked the first time we’ve seen four consecutive positive closes in the markets since 2007. Those of us with long biases in our portfolio were finally given a little bit of respite from the onslaught of relentless selling. Does that mean that this is finally the bottom? Will this rally have any legs next week?
For those of you who are afraid you “missed the bottom” and are rushing to reallocate your cash on the sidelines, I wouldn’t get moving so fast. To put things in perspective and provide some perspective for expectations going forward, I’ve collected some really interesting analysis from around the blogosphere on likely trough valuations and the long term return expectations for the market.
- Calculated Risk provides his analysis of the temporal order of business cycles
- EconBrowser presents an analysis of expected dividend reinvested, stock market returns if we were truly to spiral into “The Great Depression II”
- GuruFocus provides a similar analysis of expected market returns over the next decade using total market cap to GNP as a driver
- Peridot Capitalist writes about expected trough P/E ratios and why some analysts applying single-digit P/E ratios to current earnings may be way off the mark
- Ticker Sense compares current market correlations to historical performance and thinks we may be near the bottom
- Credit Write Downs – seriously the best blog I’ve read covering the current financial crisis
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