Freeper Investing Thread

Great time for investing! Gold & silver have been recovering for a couple weeks now and a stock index rally is already in it's sixth week. What's next --can it last? Pundits (as usual) are covering all sides, so anyone wanting to indulge their confirmation bias need only pick their favorite flavor op-ed:

Downside

Upside

not de-sided

Falling inflation a worry for Europe but also the world

Cramer Remix: Warning about Friday's rally

Global Economy Weekahead - Falling inflation a worry for Europe but also the world (h/t Chgogal)

Hotcakes Actually Aren't Selling That Well - Kyle Stock, Bloomberg BW

Why Wall Street Breeds Bad Apples - Suzanne McGee, The Fiscal Times

Bankers Lie. So Does Everyone Else - Leonid Bershidsky, Bloomberg

Giving thanks for big stock gains

Investors: Damn Ubergate and Full Speed Ahead With Mega-Funding

Europe not at risk of full-blown deflation: ECB's Constancio

Loading Up on Stocks--After You Retire - Robert Powell, MarketWatch

Venmo: Cash Is for Losers! - Felix Gillette, Bloomberg BusinessWeek

Why the Bears Are Wrong About 'Unhealthy' Market - Jeremy Hill, Forbes

Is a market top setting up?

A Giant Paradox In the Markets & Economy - Neil Irwin, NY Times

Looking at the new stock highs we want to know two things: first is the surge normal, and second is the increase out of proportion to company earnings and dividends.

So lots of folks check out the ratio gotten by dividing stock prices by their earnings (Price/Earnings Ratios) or by dividing stock dividends by stock prices to get a dividend yield percentages. Forget the pundits, they get it wrong. In fact, here's Obama saying PE's were bullish (he miss pronounced it as 'profit earnings ratio') at the very time they were spiking to an all time bearish.

These days anyone can get stats going back over a century --here's a link to Bob Shiller's site at Yale w/ S&P valuations from 1871. A plot of the index plus PE and div yield looks like the graph on the right (click to enlarge), and going back over all the data kind of shows the idea that when stocks are cheap the PE goes down and the dividends look big. OK, some of the time they show that.

However, nobody here is managing his life savings over a 143-year time frame so lets zoom in on the past 14 years:

Doesn't matter what the pundits say, the numbers are not telling us stocks are over priced. Valuation prices are right where they were at the beginning of 2008. Bad example. They're right where they were in the beginning of 2004.

Bottom line here is that our upcoming Thanksgiving Day we can add this rally to our long list of things we're grateful for. Since the whole idea of flavoring wine w/ toast (hence "toasting") began around the time of the first Thanksgiving Day, my extended family celebration will most probably begin the meal with a shared toast "...to all that has come to pass!"

This is the thread where folks swap ideas on savings and investment --here's a list of popular investing links that freepers have posted here and tomorrow morning we'll go on with our--

Open invitation continues always for idea-input for the thread, this being a joint effort works well. Keywords: financial, WallStreet, stockmarket, economy.