Albert Edwards: "At A Record High Median Price To Sales Ratio" There Is "Nothing Worth Buying"

Tyler Durden's picture

Spoiler alert: Albert Edwards is not exactly bullish. Perhaps like Rosenberg, he too needs to spend a weekend or two on the Ray Dalio ranch.

First on China:

Chinese policy makers are locked in the same old failed credit simulative policies as the west to keep growth going. Indeed, the Chinese GDP ship appears to be steaming ahead in Q3 at a very respectable 7.8% yoy rate. This is the big message the markets have consumed. But look at the ship closely from the front or rear and you can see the ship increasingly rocking violently from side to side while still making forward progress. And are those Chinese policy makers that can be seen manically running from one side in an attempt to keep the ship from foundering? This is a totally unsustainable situation in my view. But again, no-one is listening.

And next, the US:

Only the brave can react to what they see and leave the markets. The global macro looks an appalling mess and even more importantly, long-term equity investors can find nothing worth buying. For equity investors we are closer to 2007 than 2001 as the vast bulk of the equity market, as represented by the median PE, PB or Price/Sales, is expensive. The US median price/sales ratios is at a record high, indicating that there is practically nothing cheap in the equity market left to buy.


Dear Albert: our condolences; the reason no-one is listening is because a comic term we came up with, namely BT(M)FATH, has become a daily investment strategy. And as long as the Fed allows that kind of idiocy to coninue, nobody will listen. Why should they?

In conclusion, here's J.Paul Getty:

For as long as I can remember, veteran businessmen and investors – I among them – have been warning about the dangers of irrational stock speculation and hammering away at the theme that stock certificates are deeds of ownership and not betting slips… The professional investor has no choice but to sit by quietly while the mob has its day, until the enthusiasm or panic of the speculators and non-professionals has been spent. He is not impatient, nor is he even in a very great hurry, for he is an investor, not a gambler or a speculator. The seeds of any bust are inherent in any boom that outstrips the pace of whatever solid factors gave it its impetus in the first place. There are no safeguards that can protect the emotional investor from himself.”

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achmachat's picture

he's lying!

yesterday Icahn tweeted that Netflix is a buy!

doesn't that guy read Zerohedge?

King_of_simpletons's picture

The meme is to buy overvalued items and keep buying them because the overvalued items become ubervalued pretty soon. 

Panafrican Funktron Robot's picture

The stock market has increased about 40% slower than the Fed's adjusted reserves since the March 2009 low, so I would suggest that we are actually just in a continuing market crash in real terms. 

andrewp111's picture

What are you talking about? The market cap of the S&P 500 increases $3 for each $1 of QE.

max2205's picture

Fuck investing when goog goes up 130 points overnight and Nflx goes from 280 to 390 to 310 to 330


Weeeeeee.  What can Amzn do for me overnight tonight! 

ParkAveFlasher's picture

I'm buying miners.  I'll have another drink, bartender.

Headbanger's picture

I'm buying reloading gear.

I think I'll pour me another scotch and thanks for reminding me!

Grande Tetons's picture

Nothing worth buying is equal to everything is worth selling.....especially for those with nice gains. 


Not a ringing endorsement for BTFATH. 

Seriously, if I had been long this market since 2009, I would have no problem taking some gains off the table. Unfortunately for me I took my gains off last year and missed a shitload of future gains. However, I sleep well. Go figure. 

Dr. Engali's picture

You'll never go broke taking a profit.


~ Somebody smarter than me~

Grande Tetons's picture

It is not what you trade it is how you trade


Somebody smarter and richer than me. 

dontgoforit's picture

I did the same thing.  Pulled everything at 13,800 or thereabouts and haven't had the guts to get back in.  Got a 3%'er and am holding tight.  Too close to retirement to risk the fall.

Winston Churchill's picture

Rockerfeller did well by "selling too early".

According to him the secret of his success.

Better early than one minute late.You cannot outrun the algos.

Grande Tetons's picture

Ijndeed, and "buying too late" has been the failure at the retail end as long as I have been investing/trading. 

Dr. Engali's picture

This guy isn't drinking enough kool aid. He needs some one on one time with reverend Jones to set him straight.

Hal n back's picture

Getty is dead, right?


Rainman's picture

....yah, the survival rate remains zero.

gjp's picture

yeah and so is the idea of the professional non-speculating investor.  The professionals are way more responsible for this bubble than the retail saps that everyone attributes irrationality to.

Bay of Pigs's picture

Nothing worth buying?

Silver looks pretty cheap to me @ $22. And gold is down 22% YOY.

achmachat's picture

"nothing worth buying" that he's allowed to talk about.

greatbeard's picture

>> And gold is down 22% YOY.

There's been a awful lot of money lost trying to pick bottoms.  Ask me how I know.

Bam_Man's picture

I just sold a 998 oz. Johnson-Matthey Silver bar to Gainesville Coins last Thursday.

That's your bottom, right there.

Bam_Man's picture

Sometimes the size of the stack has to be slightly reduced for liquidity purposes. Of course this situation only arises at the worst possible times.

ebworthen's picture

Reed Hastings talked down his own stock yesterday (NFLX +425% in one year); so if they don't listen to that, what will they hear?

South Seas/Black Tulips televised and on the interwebs!

joego1's picture

The fundamental reasons for buying stocks and investing in companies have been poisoned by greed. It's just a Las Vegas night on the town now complete with the mafia.

brusty4's picture

Maybe I'm stuck in a 2012, but I remember and understand BTMFD.  I'm a little lost and not sure what BT(M)FATH stands for?

Iam Yue2's picture

He is half right.  But the problem is that in a non-taper world, there is also nothing worth selling.

pragmatic hobo's picture

"long-term equity investors"? what are they?

dontgoforit's picture

Your average ignorant investment joe like me.  Use to be long-term.  Am now 'no-term.'

Atomizer's picture

You are not thinking out the entrepreneurial spirit box. You can still buy up cheap meth addicted prostitutes and scatter them around the US Treasury, Federal Reserve, K Street, and US Embassies territory. Deem bitches will be turning da benjamins 24/7.  


I hope you understand my ridicule Mr. Albert Edwards. You’re telling everyone, our current slave market is saturated under the current economic conditions. Any new investment on debt backed slaves will yield minimal returns.

CheapBastard's picture

At least you can dump an overpriced stock in seconds with a tap of your keyboard key.


The overpriced Housing Market is another story. I'm seeing more and more houses sit there For Sale 126 days....285 days, and so on.  Oh yeah, how about all those foreclosures where people are living rent free.

Something's got to give and Big Time.

dontgoforit's picture

We've got a mini-building boom going on around us.  There's 15 new homes built & sold in the last 6 months - another 15 in progress.  Granted, these are all $200-$300K houses, but they're sold before they're finished (around Athens, GA).

Kirk2NCC1701's picture

"Nothing worth buyin".  Bullshit!  Depends entirely on how deep your investment pockets are.

Ok, maybe few stocks are worth buying (in the US or the EU), or stocks for the 401k masses and the overpaid Fund managers, but there will always be good stock to buy... somewhere.

If you can cough up tens or hundreds of millions, there is PLENTY of commercial real estate to buy up in the US.  In fact, as I've been saying for some time -- but have either been ignored or overlooked (in not having my 'following') -- while residential RE is hitting really rough patches in some areas of the country, Commercial RE is BOOMING in some areas. 

Title companies are doing overtime in closing commercial RE deals, as well as doing refi's on other deals.  That's a FACT, Jack!  The "1%" is busy as hell in converting fiat into REAL assets.  In this case, into "Productive RE".

sockratte's picture

all in to the dax. DE0008467440

price index still more than 1000 points to got till ath...

1989's picture

Mickey Mouse Club house using price-to-sales. Of course it is at an all time high because margins are at an all time high, so those sales are more valuable - ever heard of earnings?