Sunday, November 23, 2008

Market Review - November 23rd, 2008

My post here pretty much summed up the way the market has been this year

But, focusing on this weeks movement I think the following:

1) S&P 660-700 was a price range I was starting to hear a few weeks ago but I was hearing too much "fair value" when the S&P 500 price levels hit 800, which told me that we had ALOT of downside risk remaining. Given that S&P500 EPS estimates are 15%-20% too high, in my opinion, shaving 15%-20% off of S&P500 price levels gets us to 640-680 on the S&P 500. That is my target range for when the market MIGHT get near a bottom. Frankly, at this point it is a guesstimate but one I'd put ALOT more credence in then most Wall Street Pundits these days.

2) Anyone see the way the financials performed this week? I commented about it but, after that, it just got WORSE and WORSE and WORSE....

Here is a two week chart of the 2 largest banks in the U.S. and Citigroup. You can see how we had some major declines in major financial stocks this past week. Given that the financials have LED this decline they gets me a bit spooked re: the near-term future.

3) I had to book a trip to Vegas for January of 2009 (bachelor party so, twist my arm, I had to go :) ). I'll update everyone re: what I see when I get back but this is what I noticed from afar.

- Airfares are TOO EXPENSIVE. Gas has come down NOTABLY but airlines continue to charge LUDICROUS fares and their times STINK. I am going American one way and Southwest another to drop the cost to $300 from Dallas. Oh, and my free miles couldn't find a flight worth a crap to use them on

- I got a room for $70 a night vs. $150 published on major websites. This is Thurs/Fri/Sat. The longer I waited the more the rooms in Vegas kept coming down.....

4) Any financial review/post not commenting on the auto companies would be crazy. Without MAJOR re-structuring the U.S. auto industry doesn't deserve any $$$. It would be throwing good $$$ after bad $$$.

Dan Ross

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