Today Bloomberg had an article discussing that after the recent panic in the markets, the S&P 500 has a valuation that is 19% below February of 2011. It is important to keep in mind that even in February 2011 the market was not overpriced, so we are working from a very low base. It is my belief that market participants have been more than willing to sell at the first sign of smoke so that they don’t have to relive the summer trauma of the last two years. Because this panic has been swifter than the last two, I’d expect to see a more pronounced recovery. Europe is very close to an inflection point and I believe that transformational changes can and must be made that in essence will unionize the banking system. Many stocks are trading below their 2009 lows despite showing boasting higher book values and earnings. This means that when the panic calms down the rally will likely be quite severe, particularly for companies trading at the cheapest levels relative to book value and earnings, which are generally the types of securities that we like to own. Below is the article!
INVESTING IN THE FINANCIAL MARKETS INVOLVES RISKS. OPTIONS ARE NOT SUITABLE FOR ALL INVESTORS.