Originally Posted by
Blue Skies
From what I've been reading over the weekend, what happened to the markets last week falls easily within the bounds of 'normal volatility' & not the start of something more worrying.
There's no recession coming, either in the US or here, and anything which anyone could possibly claim to have triggered this (e.g. slightly raised interest rates) has been known about & anticipated for so long, it's already been factored in to the general equation/prices.
In other words, nothings happened last week which has taken 'the market' by surprise, so any loss of confidence is likely to be artificial (whipped up by media hyperbole, herd reinforcement, algorithms etc etc) & therefore short lived.
In the US, if we take the FANG's (Facebook, Amazon,Netflix & Google ) out of the equation, average US company earnings are at a PE of around 13 with forecast projected earnings growth of around 20% next year, maybe a little less the following year, which sounds fine to me. Trump's going to meet with China's Xi Jinping next month & likely hammer out a trade deal which will be v positive.
Here, obviously a few stocks with high PE's like A2 which are so difficult to put a value on are going to swing wildly, but I could just as well imagine it being back at $13 before Christmas. Many others have conservative PE's & are making good profits.
Anyway just thought i'ld add a few thoughts to the mix at the end of the weekend.
PS & good luck everyone for the coming week