Blodget: U.S. Stocks Overvalued By 30%, Headed For Bubble Territory

businessinsider.com:

As the latest update of Professor Robert Shiller's cyclically adjusted PE ratio shows, US stocks are now more than 30% overvalued, at 21X earnings. That's more reasonable than the 100%+ overvaluation in 2000, but it's closing in on the level of the three other bubble peaks of the 20th Century: 1901, 1929, and 1966.

Read the whole story: businessinsider.com

Comments

[lvdragonlady]

03:00 PM on 01/12/2010

Stocks are not the only thing 'over-valued'. There are houses, cars, gas, food, cable tv and utilities can all be on the same list.

[my whitehouse]

12:12 PM on 01/12/2010

neocon and globalist interests are preventing financial reform & job creation.
good articles: http://iamned-website.blogspot.com

Goldman always seems to win

[NeoconGal]

02:31 AM on 01/12/2010

By shares in weapons companies, that a growth industry these days.

[MrBadExample]

08:32 PM on 01/11/2010

Blodget is reporting what some others with better track records are saying. Eric Sprott, whose hedge fund has outperformed the market for the last nine years, is saying that once the last of the stimulus is spent around March and the economy is still flat, there will be downward pressure on the market. He's also saying that Treasury bills will have to increase interest rates, which will kill off what little recovery there is in housing and also boost inflation.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akUcvHutU8i0

[ntmessage]

06:09 PM on 01/11/2010

If you listen to this headline and ignore the facts that the author states at the end of article you may regret it for the rest of your life. Here it is:

"On the other hand, it is possible that that enormous stimulus and zero interest rates over the past two years will produce that "v-shaped" recovery. At this point, given the extent of the recent rally, it would presumably have to be one heck of a "V" to send stocks soaring from here. But the last eight months have already made idiots out of almost everyone."

Further, this author may be the first in the line of (his words) idiots based upon past prognostications. Frankly included chart looks more like a move that just got started “up” in the market than a move “down”.

Of course speaking of idiots. If we lose Bernanke because congress wants to blame anyone else except themselves, the fledgling confidence in the market thus far will all be for naught.

[BurtonOerney]

05:02 PM on 01/11/2010

I felt bad that Blodget didn't get hyperinflation for Christmas again. This is two years in a row that he was supposed to clean up with his foreign investments. Blodget and Peter Schiff should maybe be reconsidering their inflation prediction models.

[mdlawyer2]

04:27 PM on 01/11/2010

"In 2002, then New York State Attorney General Eliot Spitzer, published Merrill Lynch e-mails in which Blodget allegedly gave assessments about stocks which conflicted with what was publicly published. In 2003, [Blodget] was charged with civil securities fraud by the U.S. Securities and Exchange Commission. He settled without admitting or denying the allegations and agreed to a bar from the securities industry. He paid a $2 million fine and $2 million disgorgement." Now there's a man you can trust. "In early 2000, days before the dot-com bubble burst, Blodget personally invested $700,000 in tech stocks, only to lose most of it in the years that followed." Utterly brilliant as well. Blog must be short, and needs the market to drop, lest he catch it in the shorts.

[mrspiffy]

02:44 PM on 01/11/2010

Agreed...these prices aren't deserving due to the underlying fundamentals.
http://yieldpig.blogspot.com/

[thestargazer]

01:24 PM on 01/11/2010

I realize that it's a bubble and am surprised by the inflated values. Nonetheless, make some money while the makin is good. Be careful though, this thing could come down anytime?

[3dtrix]

01:21 PM on 01/11/2010

The hardest thing in the world for people to let go of are the lies they tell themselves to get through another day, another week, another year. People still believe in magic beans, it appears - just put in a little money over here - and a lot of money comes out over there - you don't have to actually DO anything - just hand your money over to the folks who know how to make it grow. It's that moment of "handing it over" where the power is, and where the only money is made. It's a confidence game. If I can get you to reach into your pocket and give me money you actually had to do something to earn - I win, no matter what happens next.

Ever been in a casino? When someone wins big - there's always a big show about it, and everybody in the area knows about it. The casino makes sure that everybody sees the winner - and then they go back to milking the losers. Same with the stock market - it's a titanic shearing mechanism. Trainloads of money arrive, a few folks make out pretty well - and when the wool gets long enough - poof! - the shears come out, and gabillions "vanish". How many times has it happened? How soon will the rubes figure out the house always wins?

[BobsNotWorking]

01:32 PM on 01/11/2010

You've reminded me of the old stock broker joke, "I made money, the house made money and two out of three ain't bad."

[Bitsko]

01:01 PM on 01/11/2010

This is the second reference on HuffP0 over the past week to the criminal Henry Blodget. What's up with that?

[hypnotoad72]

12:55 PM on 01/11/2010

They've been warning that for months. I'm surprised the pimple, I mean the bubble, hasn't popped yet. Either way, it'll be messy once it does pop.

[Haus]

01:00 PM on 01/11/2010

It will be all Bush's fault when it pops right?

[3dtrix]

01:06 PM on 01/11/2010

Still oozing from that wound? Change the bandage and realize you'll be crippled for life...

[Leigh49]

04:56 PM on 01/11/2010

You betcha.

[FogBelter]

12:18 PM on 01/11/2010

I suspect the run up of the Stock Market is related to the $120 trillion dollars that was added to the OTC Derivatives Cloud of $750 trillion in the last year ...

[spinns17]

12:06 PM on 01/11/2010

its the bailout money we gave to the banks .there just trying to suck us into the market again.hey wall street its not going to work anymore.you folks blew it.

[SuperBunny]

11:34 AM on 01/11/2010

The bubble will have to pop this year.