Stock valuations haven't gotten this bubbly since the dot-com
"The last time gains in stocks outpaced profit expansion by
this much was in 1999, when equity valuations surged 19% in a
year to 30 times reported profit. That bull market ended the
following year, with the S&P 500 tumbling 49% from March 2000
through October 2002 as the dot-com bubble burst."
So far in 2013, the SPDR S&P 500 ETF (NYSEARCA:SPY) has
climbed 15.81% YTD, despite recording the slowest earnings growth
in "non-recession" years since 1998. The trailing 12-month earnings
for S&P 500 (NYSEARCA:VOO) companies rose 2.4% in 2012 and just
2.5% for the first seven months of this year, according to
For Q2 2013 earnings, 72% of the reporting S&P 500 companies
(SNP:^GSPC) recorded earnings above mean estimates.
Looking ahead to Q3 2013, 85 companies have already issued
negative EPS guidance, according to FactSet.
Since the beginning of the year, the SPDR Dow Jones Industrials ETF
(NYSEARCA:DIA) is ahead by 14.71%, the Nasdaq-100 (
) is up by 16%, and developed market stocks (NYSEARCA:EFA) are up
by just 7.78%.
Since bottoming in 2009, the S&P's 145% rally has outlasted
the average bull market length of 49 months by four months.
Profit Strategy Newsletter
uses a combination of market sentiment, fundamental/technical
analysis and common sense to be on the right side of the market.
Since the beginning of the year, 78% of our time stamped ETF picks
have turned a profit. (through 6/30/13)
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