Q&A

Folks..I strongly encourage you to send in questions even if they are very basic. After all, my goal here is to communicate my understanding of things to people who are not expected to be aware of financial terminology and the latest happenings in the market.I sent in a question to Trader Mark and he replied immediately and I liked his straightforward reply. I will attempt to do the same.

Q from me:

Hey Mark,

    Firstly, I've been impressed with your commentary - it's honest
and entertaining (and of course insightful). I'd like to know with
all the carnage going on, what are the markets pricing? In spite
of hedge fund blowups etc. and all the uncertainty, what earnings
for SnP are we anticipating? I mean...i don't think we expect
earnings to fall below $60 next year, do we? But still, if companies
have enough cash to weather this and corporate yields for
non-financial companies are still so high, I guess they are a safer
bet than stocks right now considering a lower probability of
defaults. But I can't state any of this in numbers, wondering if
you can.
Stimit

A from Mark:

I don't know what earnings will be next year - a lot of it will be based on availability of credit which we should know within 90 days. If we are stuck at this level it could be horrific simply because we have lending not near anywhere where it should be. We have to see what the new fed programs they are rolling out over next two weeks do to the market and if it opens the spigots

Trough PE ratio is generally 7 so thats why people are throwing around $60 x 7 = 420 which takes you back to mid 90s.