“And the burnt fool’s bandaged finger goes wobbling back to the fire”. Kipling
At a time of extreme bullishness on financial TV it’s good to remember how much money was lost when bullishness peaked in the past. From 2000 to 2003 the Nasdaq composite went from 5,046 to 1,114, an 80% drop. From 2007 to 2009 the S&P 500 fell almost 60% while the Dow fell from 14,198 to 6,507.
Six years ago in February of 2007 CNBC’s Bob Pisani claimed, “When you are in a global expansion like this, to sell is foolish.” On the same program Ralph Acampora said “I don’t think I am bullish enough.” Pisani further exhorted, “People who keep talking about this real estate bubble don’t understand.”
Zero Hedge comments, “Over the past few weeks, virtually all of the empty chatterboxes on financial comedy TV have been repeating ad infinitum just how much cheaper the market now is compared to its prior peak in 2007 because, get this, it trades at “only” a 15x multiple compared to the 18x or so reached at its peak in 2007. By doing so these same hollow pundits simply confirm just how painfully clueless their cheerleading is, as the market, or what’s left of it never trades on current earnings but always future EPS. When one looks at the future on an apples to apples basis, the market now is more expensive than it was back in 2007!”