Les Jones

“The Market” is being pumped up by financial manipulation, while real earnings resulting from regular business operations are generally quite low. Stories of how XYZ Corp beat estimates by a penny per share are much ballyhooed, ignoring the fall in earnings, careful setting of estimate levels, and internal adjustment of finances. Even in normal times it’s not hard to find a stock with P/E ratio in triple digits. If ZYXCO makes 1/2 cent a share and sells for 97 cents there’s your ratio. Now the difference is, it’s not just isolated stocks that are like this.

Interesting that there’s a lot of discussion about how the massive liquidity created by China’s central bank has gone straight to its stock market (with all the related predictions of a giant crash when the flow stops), and virtually none about the exact same phenomenon in the U.S.

[...] into the theory that today’s high stock prices are caused - not by fundamentals or earnings, which are in the toilet - but by an excess of dollars floating around and chasing those stocks. See More on the Federal [...]