Peridot Capitalist

A theme of mine in recent weeks, as well as for 2010, is that the stock market has risen 70% from the March lows and has begun to price in the current consensus forecast of $75 in S&P 500 earnings, which would be a 35% increase from 2009. As a result, I think the Wall [...]

I have been prepared for a market correction for a while now, but we have yet to get one. The rally off of the March lows has reached +61% and the momentum continues to be strong. Will it continue even as companies report their third quarter earnings?
Nobody can know for sure, but over the years [...]

I have written here previously that my personal fair value target for the S&P 500 index was around 1,050. I got there by using an average P/E multiple of 14-15 and projecting a “normalized” earnings run rate for the index of around $70 annually. The index has now risen 60% from its March low and [...]

A disturbing recent trend has emerged in the U.S. equity market and many are pointing to it as a potential reason to worry that the massive market rally over the last six months may be running out of steam. Investment strategists are concerned that a recent rise in speculative trading activity is signaling that the [...]

As we already know, the stock market moves based on how reality compares to investor expectations. The chart below, courtesy of Bespoke Investment Group, shows just how good earnings have been so far this reporting season.

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After a very surprising employment report this morning (payrolls declined ~350k versus expectations of ~525k), the market reacted well at first but sellers have emerged. The fact that the market is flat today tells me the rally is losing steam (normally that type of jobs report would mean 200 or 300 points on the Dow). [...]

With most first quarter earnings reports having already been released, along with bank stress test results, the action in the market has died down considerably. After a 40% rally, the S&P 500 has been consolidating between 875 (a key technical support level) and 930 (the recent high). Such backing and filling is a strong sign. [...]

To me this swine flu outbreak looks a lot like avian bird flu; fairly contained and overhyped. Of course anything is possible, but as Wall Street frets about swine flu (Dow futures are down 150 this morning), investors should be on the lookout for investment opportunities. Worries over bird flu led to numerous bargains, especially [...]

Are you surprised that the market is acting as well as it has lately, especially with earnings season having begun? Still waiting for that overbought correction after six weeks of gains in stocks? Me too. Why the relative strength? Well, according to Bespoke Investment Group first quarter earnings are coming in well above estimates so [...]

Some people are making the case that the stock market can rally meaningfully even without the financial sector recovering. I disagree simply because earnings are being negatively impacted so severely by loan losses and mark to market writedowns at the large financial institutions that investors won’t get a clear picture of what a reasonable expectation [...]