If This Chart Doesn't Scare You Out Of Stocks, Nothing Will

Authored by Sue Chang via MarketWatch.com,

A lot has changed since the stock market crash of 2000. Apple Inc. has gone from being just another computer brand to becoming the most valuable company in the world, Amazon.com Inc. went from being an e-book retailer to a byword for online shopping and Tesla’s Elon Musk has risen from obscurity to Twitter stardom.

Too scary for words

Yet some things never change and Doug Ramsey, chief investment officer at Leuthold Group, has been on a mini-campaign highlighting the parallels between 2000 and 2018.

Among the numerous similarities is the elevated valuation of the S&P 500 then and now, which Ramsey illustrates in a chart that he has dubbed as the “scariest chart in our database.”

Leuthold Group

“Recall that the initial visit to present levels was followed by the S&P 500’s first-ever negative total return decade,” he said in a recent blog post.

Price-to-sales ratio is one measure of a stocks value. It isn’t as popular as the price-to-earnings ratio, or P/E, but is viewed as less susceptible to manipulation since it is based on revenue.

He also shared a chart which he claims is “unfit for a family-friendly publication” that shows how in terms of median price to sales ratio, the S&P 500 is twice as expensive as it was in 2000.

Leuthold Group

“Overvaluation in 2000 was highly concentrated; today it is pervasive, with the median S&P 500 Price/Sales ratio of 2.63 times more than double the 1.23 times prevailing in February 2000.

In a follow-up post, he then reiterates how 2018 is starting to increasingly look like 2000.

“The statistical similarities between the two bulls are on the rise, and the wonderment surrounding the disruptive technology of today’s market leaders seems to have swelled to maybe 1998-ish levels,” he writes.

That upward trajectory of the market isn’t sustainable, he warns. Ramsey admits that history isn’t the best guide for the future but the S&P 500’s performance since it touched its peak on Jan. 26 is closely mirroring what happened 18 years ago.

“In the earlier case, a volatile five-month upswing that began in mid-April ultimately fell just a half-percent short of the March 24th high by early September. This year, a similarly choppy, six-month rebound has taken the S&P 500 to within 1% of its January 26th high,” Ramsey said.

Leuthold Group

There are other resemblances such as healthy breadth as denoted by the uptrend in the daily NYSE Advance/Decline Line while corporate profits, measured by Leuthold’s internal earnings indicator, are extremely robust, according to Ramsey.

But even without 2018 mimicking 2000, the persistent trade clash between the U.S. and its trading partners that in the worst case scenario could derail global trade looms as a huge threat to stocks.

China is expected to levy tariffs on $60 billion of U.S. goods if the Trump administration proceeds with its plan to impose 25% tariffs on $16 billion in Chinese imports later this month.

On Aug. 22, the market will officially become the longest bull market in history. Coincidentally, the previous titleholder is the decade-long one that gave up the ghost when the tech bubble burst in 2000.

Comments

lisa.roy39 TLT Thu, 08/09/2018 - 09:14 Permalink

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s­­­
◕✾Good Luck◕✾ http://www.todaysfox.com

In reply to by TLT

lock-stick Adolfsteinbergovitch Thu, 08/09/2018 - 11:30 Permalink

It's all ONE SICK, PATHETIC SPAMMER!!!

•• lisa.roy39  ("I SUCK DICK ON THE INTERNET FOR LAND ROVERS!")

•• Adolfsteinbergovitch ("I TORMENT THE WOMAN WHO SUCKS DICK!")

•• Free This (ABOVE, in all his 7th grade glory - MONKEY BOY!!!)

•• roea.rita ("I SUCK DICK ON THE INTERNET FOR LAND ROVERS!")

•• Cryptopithicus Homme (bitcoin spammer - imaginary "friend")

•• Leakanthrophy (PORN for Jesus!)

•• 07564111 ("I PRETEND I DON'T KNOW ANY OF THEM!")

•• MoreSun (whacked, OH SO WHACKED!!)

•• Africoman

•• Sanctificado

•• beemasters

•• PrivetHedge

•• Cheolli

•• bobcatz

dozens and dozens and dozens of banned log-on's -- more than seven years!

 

....and all the while, the pathetic little SPAMMER sits in his leaky, moldy, smelly single wide in Western New York, surrounded by garbage and dirty clothes, trying to find his dick amidst rolls of fat, talking to his ACTION FIGURES and wondering where his life went.

In reply to by Adolfsteinbergovitch

takeaction TLT Thu, 08/09/2018 - 09:37 Permalink

Why would ANYBODY put up with that TESLA Horseshit.  I read through all of that link....these people are as Delusional as Democrats.  One guy said "Kudos to TESLA for not delivering a car with problems..."  It is funny...I can go RIGHT now...and buy the BEST CARS EVERY MADE IN FUCKING HISTORY......."Toyota Camry or Honda Accord" and pick it up now with a proven track record.  Better YET...for the price of the "FIREBALL" Model 3...I can have one of each.  A New accord...AND a New Camry....and the Maintenance and depreciation are near non existent in these cars.  Especially if you buy them one or two years older.  I guess people just have way too much money.

In reply to by TLT

j0nx takeaction Thu, 08/09/2018 - 09:55 Permalink

I bought a certified 17 Accord EXL V6 sedan with 13k miles on it early this year. Paid $24k for it plus tax. Basically a brand new car with full warranty for $10k off new. Last year of the V6. This car is amazing. The first year of ownership is the worst for depreciation and then the Hondas and Toyotas lose very little per year after that. Buying a lightly used same year car is the smartest way to go. Let someone else pay the freight and first year depreciation. I love this car. Only auto I have ever been in that will chirp 2nd gear. My 2001 Mustang Bullitt couldn't even hang with this thing. Total sleeper.

 

I have a good friend of mine that bought a model 3 earlier this year around the same time and his has been at the Tesla dealer for 3 months for a vampiric draw that they can't figure out. He is going around and around with them about it to get it fixed and they can't figure it out. The whole process has been a major PITA for him. He's about to take legal and PR steps on them.

In reply to by takeaction

takeaction j0nx Thu, 08/09/2018 - 10:17 Permalink

EXACTLY...this is the way you buy and own cars.  A car is a tool.....You buy a Dewalt or Makita drill with a proven track record...and it works...for decades.  You buy a Harbor Freight heap of shit...it burns up in a week (Like Tesla).....find the best value...make sure the unit is proven....buy it once Done.  It is not that hard.

 

In reply to by j0nx

Free This takeaction Thu, 08/09/2018 - 10:29 Permalink

My Toyota's all have over 100K miles and purr like kittens, bought 'em used and are well maintained! I expect 300K or more miles out of them. Why would I want a car payment? I agree with you, Tesla can keep it's overpriced flamethrowers.

They are just a remanent of Oblahblah's failed legacy anyway - subsidized trash!

People can't think past their electrical outlet...coal and natty gas is burning to charge those batteries!

In reply to by takeaction

lock-stick lulu34 Thu, 08/09/2018 - 11:31 Permalink

It's all ONE SICK, PATHETIC SPAMMER!!!

•• Free This (ABOVE, in all his 7th grade glory - MONKEY BOY!!!)

•• lisa.roy39  ("I SUCK DICK ON THE INTERNET FOR LAND ROVERS!")

•• Adolfsteinbergovitch ("I TORMENT THE WOMAN WHO SUCKS DICK!")

•• roea.rita ("I SUCK DICK ON THE INTERNET FOR LAND ROVERS!")

•• Cryptopithicus Homme (bitcoin spammer - imaginary "friend")

•• Leakanthrophy (PORN for Jesus!)

•• 07564111 ("I PRETEND I DON'T KNOW ANY OF THEM!")

•• MoreSun (whacked, OH SO WHACKED!!)

•• Africoman

•• Sanctificado

•• beemasters

•• PrivetHedge

•• Cheolli

•• bobcatz

dozens and dozens and dozens of banned log-on's -- more than seven years!

 

....and all the while, the pathetic little SPAMMER sits in his leaky, moldy, smelly single wide in Western New York, surrounded by garbage and dirty clothes, trying to find his dick amidst rolls of fat, talking to his ACTION FIGURES and wondering where his life went.

In reply to by lulu34

Cursive TLT Thu, 08/09/2018 - 11:11 Permalink

RE: the Tesla link

 

The thing that stands out the most are the fanboi comments.  These "people" are just crazy.  What a dream it would be to have them as clients/customers!  These fanboi's make it sound as though have your dick cut off by Elon Musk would be so cool, because he could probably reattach it BETTER THAN GOD GAVE YOU.  The unbridled sycophancy....  

In reply to by TLT

hannah TLT Thu, 08/09/2018 - 15:43 Permalink

the delay is common....the tesla battery employees must install the batteries before delivery. since tesla started using D cell batteries it take 2 weeks to install the 27,000 D cells.........i know a guy that works for tesla and he said they were going to use AA batteries but just taking the battery covers off 65,000 AA compartments took 2 months......hopefully tesla can get back to using laptop batteries...

In reply to by TLT