Monday, October 20, 2008

another P/E Ratio post

when a blog with a technorati authority of 4, 60 odd subscribers and 75 visitors on an average day gets one of the top placements on searches for something as basic as >S&P 500 forward P/E average< something is awfully wrong with the world. EMH my ass.

anyhow, on that search above another page on the list was a seeking alpha 'article' from the slicksters* at 'Bespoke Investment Group':

Crazy P/E Ratios

the jist of it is that companies like GNW, X, and CF have really low forward P/E ratios. well of course they do! but come on, let's consider these three companies for moment.

GNW deals in Mortgage Insurance! wait till their credit rating gets dropped.

X? X? show me some bankruptcies in the steel industry and then we'll start looking for some deals.

CF? well, I could actually get to like this one. while the forward earnings estimates seem wishful, even at half of trailing earnings the stock would be a reasonable value here. CF is a fertilizer company, if you're not aware. seeing as though I'm quite confident that Ag prices will start to climb again before too long, I just can't see this stock doing too poorly the next couple years.

*should be construed as a literary phrase only. I've no insight into the trustworthiness of 'B.I.G. lol'.

Update: this is just getting absurd! I'm number two on a google search for >S & P 500 PE ratio<.