Here’s another brutal look at where P/E rations might end up going before this is all over, via Bob Bronson:
I am very skeptical of earnings forecasts, because they have been so terrible for most of my adult life. The conspiracy of optimists always seems to overestimate future earnings.
Trailing earnings are real data, not opinion of guesswork. They provide a factual basis for valuation, and not a wishful or theoretical version. Those who were claiming that there is no recession have now taken to saying we are at the worst levels of the recession. Often, we see forward earnings estimates at the heart of this faulty analysis.
Forward earnings guesswork are why the analyst community missed the credit crisis, why they could expected a 20% Q3, and 50% Q4 earnings rebound. Hence, the forward earnings consensus led to calls for 1350 and even 1550 on the S&P . . . Its now about half of that.
Rather than rely on Wall Street Analysts who are chock full of the conflicts, and seem structurally incapable of catching major economic turns, let’s revisit a long term look at P/E ratios, via historical cycles.

10 Outrageous Predictions for 2009

No Growth in China and other Outrageous Prophecies
STOCKS, ECONOMY, CURRENCIES, POLITICS, 2009
CNBC.com | 18 Dec 2008 | 02:03 AM ET
This year has been marked by astonishing and market-changing events including a $100 fall in the price of oil, the drop to zero of U.S. interest rates and the collapse of Wall Street giants such as Lehman Brothers.


Next year could bring more, equally unbelievable, happenings such as another 400 points being wiped off the S&P 500 and a slump in Chinese growth to zero, according to a report from Saxo Bank titled “10 Outrageous Claims 2009.”

Video: David Karsbol, markets strategist from Saxo Bank, spoke to CNBC about the predictions.

1. Iranian Revolution

If oil prices continue to decline, which Saxo Bank believes they will, the Iranian society will be badly affected due to the country’s reliance on its number one commodity. The government may not be able to provide the basic necessities its citizens need, which would lead to widespread social unrest, according to Saxo Bank.

2. Crude Oil to $25

The ongoing economic crisis will further dent oil demand throughout next year, sending the price ever closer to $25 a barrel, Saxo Bank said. OPEC production cuts will be hampered by disagreement and fail to stem the slide, it added.

3. S&P 500 to 500

The S&P 500 will fall to 500 points in 2009 as slowing corporate earnings will drag on the U.S. index, according to Saxo Bank. Earnings will slow because of a continued consumer recession, lead by the credit shortage. An increase in corporate funding costs, falls in house prices and a slowdown in investing programs will also add to the weakness, the report said.

4. Italy Could Drop the Euro

Italy could make good on threats to leave the European Exchange Rate Mechanism (ERM) and may drop out in 2009, Saxo Bank said, a decision which would mean the country effectively gives up the euro. The EU is likely to crack down on excessive government budget deficits, which could prompt Italy to leave the currency regulation, it said.

5. Australian Dollar to Slump vs Yen

The Australian dollar will sink to 40 Japanese yen as next year’s continued slump in commodities hurts the Australian economy, Saxo Bank said. The whole commodity complex will be left dead in the water for the next ten years, the report said.

6. Dollar to Outstrip the Euro

The euro will fall to 0.95 cents versus the dollar in the New Year, before shifting direction and rising to 1.30 cents, according to Saxo Bank. The euro-zone will face a tough year in 2009 as the banking sector will suffer because of its exposure to Eastern Europe, a region that will increasingly falter next year, the report said.

7. Chinese GDP Growth to 0%

Export-led China will be hit by the double blow of a slowing U.S. economy and the souring of commodity-based investments, according to Saxo Bank. Japan will not actually sink into recession, despite gross-domestic-product growth all but disappearing, the report said.

8. Eastern European Forex Pegs to Fail

Several of the Eastern European currencies currently pegged or semi-pegged to the euro will come under increasing pressure to decouple next year, the report said. The emerging economies are vulnerable to more credit-market disruptions, it added.

9. Commodities Prices to Plunge

Commodities are facing widespread weakness next year with the Reuters/Jefferies CRB Index to drop 30 percent, according to Saxo Bank. The consensus belief that demand has been outstripping supply for years might not even be true and more stockpiles could be revealed, the report said.

10. Yen to Become Currency Peg

Asian countries could shun dollar pegs in favor of the Chinese yen next year, according to Saxo Bank. China’s economic, political and cultural influence is growing and shifts in market re-evaluations will favor the country, the report added.

Barack Obama ETF Portfolio Sector ETFs

Consumer Discretionary Consumer Discretionary Select Sector SPDR XLY
Hospital Managers and Medicaid Companies iShares Dow Jones U. S. Healthcare Providers IHF
Natural Gas United States Natural Gas UNG
Solar Power Market Vectors Solar Energy KWT
Wind Power First Trust Global Wind Energy FAN

Oct 2008

I want to record the historical event here so that I can refer:
Starting from Oct, 2008, right after the 700B bailout got approved by the house for the 2nd time, the market tumbled. Within 5 days, market went on free fall. It dropped more than 16% in a roll.

The economic all sudden stopped running. The credit crisis starts with nobody (banks) wanted to lend with each other. I was adding long positions like crazy. Now I am all underwater.

FEED

Friday, market went up 300 pts then nosed down to -150. All Ren's holdings are underwater.

Michelle was just panic and peeled to her pants. She wanted to sell everything, especially FEED. She thinks FEED would not be able to get back to buying level for very long time. She suggested to sell and change to something else such as MOS, FRO.

MOS -- $40.8
FRO -- $42

History has been made

Yesterday, 9/29/2008, Dow down 777 pts. Today's action:
1. Buy BPT 100 shares each in Roths;
2. Average down UYG 200 shares;
3. Average down SSO 200 shares;
4. Average down 100 shares of FRO & Sell SPY puts in r2y.

building up a profitable portfolio

1. renshan2: DBA & GDX holding with option play.
2. renshan2735: UNG, DUK, and SPY trade
3. r2y: FRO & FEED & LKQX holding, option play
4. roth: BPT
5. sep: DUK

today market comparing with 73-74

中国股市

由于美国的救市行为， 全球股市大涨；这是短期行为，从中短期来看不是进场时机，是出货时机。美国此次救市， 完全是为了11月的共和党竞选。

Visited Georgetown Village at Woodbridge

The community is in bad shape. The problem is it is 100% black. Not Good.

How to create new user account

By invoke http://www.icctoday.com/_layouts/CreateAdAccount.aspx with pass user creditial

Wednesday 4-9-2008

For those days, the market was very bothering. Although there were a couple of days huge up days with huge volumes, the rest of the days were just a slow drifting. The FA side is all bad news, even Fed is admitting that the economy is going to recession. A day ago, BB said he saw the downturn would be not very serviou. Next day, the fed meeting minutes showed they were very concerned about the deep recession. From the TA side, the market is over-bought. So I have kept adding small short positions to the indices.

GOLD related ETFs

DGL Gold long
DGP Gold Double long
DGZ Gold Short
DZZ Gold Double short
GLD Gold
GDX Gold miners

Wednesday 4-2-2008

1:15 PM
Today Ben Bernanke testified infront of the congress, and said that the recession is coming. My question is that why till now he started telling the real thing, and what he had done during those 6 months.

Basically, he had cut interest rate more than 9 times, injected fed funds more than $300 billion, loss many montery policies for the banks. Now, he thinks that it is pretty enough to cure the economy or it is out of his hand. Obviously, the main street feels the pain. I don't know if it is the time to be bullish instead of bearish.

So actually, at this time, TA should be shining. From the TA, I believe that the market is at this short term top.

Monday 3-17-2008

9:30 PM
The market was choppy. The world market plunged, and Bear Sterns was marketed at $2. But the US market pre-market went down 200 and at close, the Dow was up 20 pts, Naz down 35, and SP down 11 pts. The PPT at work is very clear. Intraday, DJ Wilshire 5000, Naz and SP made new low.

To me, the bottom is no there yet. Tomorrow, there will be Fed decision. Add short positions on any bounce.

Commodity ETFs and ETNs

Which of the 6 Agriculture ETFs is Best?
http://seekingalpha.com/article/64802-which-of-the-6-agriculture-etfs-is-best

Commodity ETFs (exchange-traded funds) and ETNs (exchange-traded notes) List
(click on symbol for data and articles)

Broad Based Commodity ETFs and ETNs
GreenHaven Continuous Commodity Index (GCC)
GS Connect S&P GSCI Enhanced Commodity Total Return Strategy Index ETN (GSC)
iShares GSCI Commodity-Indexed Trust ETF (GSG)
iPath Dow Jones-AIG Commodity Index Total Return ETN (DJP)
iPath S&P GSCI Total Return Index ETN (GSP)
PowerShares DB Commodity Index Tracking Fund ETF (DBC)

Agricultural Commodities ETFs
ELEMENTS Linked to the MLCX Biofuels Index ETF (FUE)
ELEMENTS Linked to the MLCX Grains Index ETF (GRU)
ELEMENTS Linked to the Rogers International Commodity Index – Agriculture ETN (RJA)
iPath Dow Jones AIG-Agriculture ETN (JJA)
iPath Dow Jones AIG-Grains ETN (JJG)
iPath Dow Jones-AIG Livestock Total Return Sub-Index ETN (COW)
PowerShares DB Agriculture Fund ETF (DBA)

Gold, Silver and Metals ETFs
iPath DJ-AIG Industrial Metals Total Return Sub-Index (JJM)
iPath DJ-AIG Nickel Total Return Sub-Index (JJN)
iShares COMEX Gold Trust ETF (IAU)
iShares Silver Trust ETF (SLV)
PowerShares DB Gold Fund ETF (DGL)
streetTRACKS Gold Shares ETF (GLD)
PowerShares DB Silver Fund ETF (DBS)
PowerShares DB Precious Metals Fund ETF (DBP)
PowerShares DB Base Metals Fund ETF (DBB)

Oil and Gas ETFs and ETNs
Claymore MACROshares Oil Up Tradeable ETF (UCR)
iPath DJ-AIG Energy Total Return Sub-Index (JJE)
iPath DJ-AIG Natural Gas Total Return Sub-Index (GAZ)
iPath S&P GSCI Crude Oil Total Return Index ETN (OIL)
PowerShares DB Energy Fund ETF (DBE)
PowerShares DB Oil Fund ETF (DBO)
United States Gasoline Fund, LP ETF (UGA)
United States Oil Fund, LP ETF (USO)
United States 12 Month Oil Fund, LP ETF (USL)
United States Natural Gas Fund, LP ETF (UNG)

Commodities-Related ETFs
Van Eck Market Vectors Agribusiness ETF (MOO)
Van Eck Market Vectors Coal ETF (KOL)
Van Eck Market Vectors Gold Miners ETF (GDX)

What Are They?

Commodity ETFs (exchange traded funds) attempt to track the price of a single commodity, such as gold or oil, or a basket of commodities by holding the actual commodity in storage, or by purchasing futures contracts. Because futures provide leverage (more exposure than the actual cash invested), ETFs that use futures contracts have uninvested cash, which they usually park in interest-bearing government bonds. The interest on the bonds is used to cover the expenses of the ETF and to pay dividends to the holders.
Commodity ETNs (exchange traded notes) are non-interest paying debt instruments whose price fluctuates (by contractual commitment) with an underlying commodities index. Because they are debt obligations, ETNs are subject to the solvency of the issuer.
Commodities-related ETFs generally track the producers of commodities, such as mining companies. While the financial performance of those companies -- and thus their stocks -- may be highly leveraged to the underlying commodity, other factors can impact the profitability of production. The ETFs, therefore, may not reflect the performance of the underlying commodity. For example, gold miners are highly leveraged to the discovery of gold deposits, exchange rates and their relationships with the countries where gold deposits are found.
Why & How To Use Them

Commodities are a separate asset class from stocks and bonds, so they provide extra diversification in a portfolio.
The case for commodities: The industrialization of the China and India and the integration of Russia and Eastern Europe into the global economy are boosting demand for commodities, driving up prices. Many people believe that this will result in a long term uptrend ("super cycle") in commodity prices.
The case against commodities: In contrast to stocks and bonds, commodities are not income generating. So ownership of commodities, including via ETFs or ETNs, is a pure bet on prices. And the expenses charged by the ETF and ETN providers and in the cost of storing hard assets or trading futures eat away at the underlying value of the fund.
Commodity ETFs and ETNs can also be used as a hedge. For example, if you consume a large amount of gasoline and heating fuel and are concerned about the impact on your income of a rise in oil and gas prices, buying an oil and gas ETF can help offset your exposure.
What to Look Out For

Commodities ETFs that use futures have diverged significantly from the price of the hard commodities themselves. ETNs, in contrast, track the price of the commodity closely. See the articles in the Further Reading section below.
There are dramatic differences in structure of these ETFs and ETNs, even for the same commodities, leading to potential differences in performance and tax treatment.
ETFs and ETNs are treated differently for taxation purposes. Current opinion is that all gains on ETNs held for longer than one year are treated as long-term capital gains, whereas an investor owning a futures-based ETF is taxed on any capital gains on the underlying futures held by the fund using the taxation convention for futures, ie. at a hybrid rate of 60% long-term, 40% short-term each year on all gains, even if the investor doesn't sell the fund. (Check this carefully with your accountant.)
Further Reading

For long term investors considering including a commodity ETF in a diversified portfolio, the value of commodities as a diversifier is addressed by Nik Bienkowski in Commodities Outperform During Equity Market Downturns. Mebane Faber discusses a portfolio including commodities exposure in An Endowment Portfolio From Publicly-Traded Vehicles. For a negative view on the investment case for commodities, see Bill Miller on Oil, Silver, Other Commodities: Don't Buy!.
Roger Ehrenberg discusses using commodity ETFs to hedge real exposure to oil and gas in Think Carefully Before Macro Hedging Your Life/Work/Oil Exposures.
The underperformance of futures-based commodity ETFs relative to the actual commodity they are supposed to track is discussed in Scott Rothbort's US Oil Fund ETF Fails Investors Consistently. Richard Shaw presents the case for commodity ETNs over commodity ETFs in Troubled By ETF Tracking Failures? Try ETNs. See also The ETN Market Heats Up With Goldman Launch; More On the Way (Matt Hougan).
Should you use a broad commodities ETF or a set of ETFs or ETNs that track individual commodities? See Richard Kang's Is Commodity ETF Slicing and Dicing Necessary?.
For further analysis of these ETFs, and comparisons between them, see: Commodity ETF Overview (Tim Iacono), A Look at the New GreenHaven Commodity ETF (Hard Assets Investor), Commodity Exposure Via ETFs: A Fund Manager's Process (Keith Lenger), Ameristock Funds' New Gas Futures ETF: An Attractive Instrument In So Volatile a Market (Matt Hougan), First Gasoline ETF Comes to Market (Murray Coleman), Natural Gas ETF Is No Long Term Hold (Zman), New iShares GSCI Commodity Trust - Key Points To Understand (Market Participant), Commodities ETFs Protect The Little Guy (Tim Iacono), The New Generation of Diversified Commodity Indexes (Rich White), New ETF Tracks Oil-Prices Across 12 Months (Eli Hoffmann) and Digging Deeper Into Commodity-Based Funds (Keith Lenger).
For analysis and discussion of agricultural commoditiies ETFs see Powershares' Agricultural ETF: The Soft Commodities Slam Dunk (Nicolas Vardy), PowerShares DB Agriculture ETF: 'Optimum Yield' or Undue Risk? (Don Dion) and Which of the 6 Agriculture ETFs is Best? (Matthew D. McCall).

Friday 3-14-2008

12:00 AM
Some observation is very important. Yesterday, it opened lower, and went up positive. The S&P said that bank's write-down was almost done. This morning, the market went up huge with good CPI numbers. But right after the open, BSC released news that it had liquidity problem and couldn't continue with its business. It was huge bomb, and stock went down close to 300 pts.

The observation here is that yesterday, the market up with no news (some fake news issued by credited company) before the real fact news out. So we need to see the facts instead of any news.

Tuesday 3-11-2008

12:20 PM
The market went down again yesterday. SP almost touched the Jan low. NAZ has been lower than Jan low. Dow is getting close. So it is in the virgin of breaking all time lows.

This morning, Fed injected $200B into the financial system. It offered 28 days loans to the banks. The market took it as good news, and went up 250 pts at one time. Here is some of my thoughts:
1. It happened on 2000 recession. The market went up huge before the next leg down.
2. The injection of this huge amount of money is in order to make the banks still functional in events such as stock market crash, or other financial crisis.

So, I believe there will be further very bad news coming in financial mainly. The key to the event is to monitor the market reaction, and measure the depth of this reaction. Sell to any strengths shouldn't be any issue here. Mainly short the finances sector, and indices.

Monday 3-10-2008

2:25 PM
The market is on the down trend. The NAZ made new low. Now the S&P has touched 1270. I have just closed all the shorts positions at 2:28 pm.