Sunday Spectacle XXXXV
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(source: The Economist)
Yay... Got a job offer :) I'm accepting it... Kind of nervous, as I'm sure everyon is with a new job but a new chapter in my life... funny how life turns out.
Thoughts on the stock market - March 2020
Right now, DJIA has a P/E of 16.8 and forwand P/E of 15.1, whereas S&P 500 is at 20.1 with forward P/E of 15.8. Source: WSJ market Data If you ignore interest rates and inflation expectations--both of these influence valuations but depends on your macro call-- the market is not cheap. Long-term P/E is around 15. Trailing P/E is around 20% (Dow) to 40% (S&P500) higher than average. Forward P/E is in line with long term average but that assumes a strong V recovery. Consensus forecast is for profits to drop 1.2% in 2020. In 2008, it dropped 25.4% so current forecast is a very mild recession. Covid-19 coronavirus is not going to last more than a few months but these forecasts are still too rosy in my opinion. So I wouldn't rely on forward P/E. The richly valued (mostly tech or high quality) have not fallen much but the distressed ones have. So if you want to outperform in the long run, I think one’s choice right now is to: • Wait for market to fall another, say...
Wow, that was pretty fast! Hope it works out for you.
ReplyDeleteThanks :)
ReplyDeleteIt's kind of crazy. I may write up on it after I settle in but it's amazing how life is. Just to give you a teaser, during the first meeting at the company--it was supposed to be a "test"--I went with the wrong group initially. Instead of the test, I went into a meeting. It was bizarre, to say the least, when an external vendor started out handing business cards and I was like 'what is this?'. I ducked out after confirming it was the wrong group. I wrote the test and was sure I didn't do too well but apparently other candidates were worse off (some thought it was more of a business job and their background was more in sales whereas it was more techie or quantitative--I'm still not 100% sure what skills they are looking for.)
ReplyDeleteI'm excited about the job but am nervous--I'm sure most of us are with new environments--given how it is a new business with probably different skill requirements.
On top of all this, I'm looking to buy a car (new job would take at least 1.5 hour to commute by public transportation) and I, crazily enough, am looking into importing a car from the US. Nothing too fancy (can't afford anythign expensive and I'm a cheap guy 8-) ) but you can save several thousand if you can find the right car and are willing to go through some hassle (if you do import, it'll probably be harder to re-sell it so one should be careful.) The problem is that I don't have enough time and I'm trying to line up a deal and get it over the border within a few days and it's looking rough. If I don't do it now, when I have free time, I will have a hard time doing it later (customs requires notice 3 days in advance and isn't open on weekends, at least for car exports near my border crosings.)
While going through all this, I need to buy a portable GPS and who would have tought that the GPS companies would have the worst product marketing in human history ;) ? It's impossible to tell what features are in a model, or which model line is premium/value/etc from the labels. Garmin, I hate you. TomTom, I hate you too. ;)
BTW, MrParkerBohn, where do you live? You are not in USA, are you?
You can call me Parker if you like.
ReplyDeleteI live in Athens, Georgia, USA, which is about 1.5 hours from Atlanta. Athens is most notable for being the home of the University of Georgia.
I was surprised at how fast you got a new job. Maybe the economy is not as bad where you are? I am doing fine, but when a job opens at the University (any full-time job at all), we literally have 100's of people apply. Any steady paycheck that comes with health benefits is hugely in demand.
I have a friend who buys foreclosed houses, and he'll look them up on the internet or whatever, and we can drive down just about any street here and he'll point them out to me - every street has a few.
We're also seeing lots of housewives who haven't worked for many years looking for work, and older retired people looking for work. We also had a couple of Phd's apply for a job as a janitor.
Sometimes I feel like I'm in the eye of the hurricane, because I see things falling apart all around me, but all this recession has really done to me is give me a chance to buy some cheap assets with my saved earnings.
Many congratulations to Sivaram. We (your readers) hope the job works out for you. The job must be in Markham or Oshawa, or something, if it is 1.5 hours by TTC.
ReplyDeleteThe economy in Canada is better than the US for now. In Canada there is especially a lot of movement in the resource sector. Even though I am an American, I've placed almost all of my investments in Canada for now because I have much more confidence in loonie than in the greenback (I have shorted the US $). There is still hanging over my head a bad commercial real estate deal made with my brother in Austin.
As for PhD's applying for a janitor's position, that's hardly surprising. I work now as a private (DIY) investor, though I received my PhD 14 years ago. There has been too many people with PhDs compared to the number of positions for well over a decade. (Plus, I was insufficiently motivated to compete for a job after being burnt in an adjunct position when I first started teaching--all the more reason to admire Sivaram's quick turn around).
congrats sivaram! im sure your investing accumen will help you on your new journey!
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