Overvalued & Underbought

With all the bad news that has been dumped upon the economy for some reason the stock market is going up. Why?

The SEC (Securities and Exchange Commission) has just set up new guidelines for core earnings. No more proforma computations. You know what proforma means - the company CEO or Treasurer waves his magic wand and says this is what I expect to appear as soon as I let the genii out of the bottle. And pigs can fly. These imaginary numbers may give his company a Price/Earnings ration of 20 which is pretty good by today's standards.

Now those mean guys in Washington have said you must reevaluate your earnings but this time figure in your stock options, pension costs and any restructuring charges. Holy Cow, that makes the P/E ratio 37. And that ain't no bargain when you are buying stock. The 100 year average has run about a 14 P/E. If the company has not been paying any dividends then this is a stock that must be suspect for any long term holding.

Because of these new guidelines the entire S&P Index P/E has gone from a 33 to 49. That is much better than it was in January 2002 when it reached 69. This number makes the entire market overvalued and still leaves me with the question of how can the market advance using these high P/Es?

There are a couple of answers and neither may be the right one.

The market has become severely oversold. The bear people have been riding it down until the news media finally recognized we have a long-term bear market. There have become too many traders who think there is no bottom and are willing to sell anything and everything. Enter the trading bargain hunters. It will now be the bears turn to be punished.

It takes money to put the market up. Where is that coming from? Our white knight, Sir Greenspan, has come in with his bags of money this past week. Look past our borders and you will see stock exchanges in every major country in the world that look sicker than ours. Foreign investors want a new home for their money and it seems the U.S. market looks darn good. As that money has started buying you may begin to see pension plan and mutual fund managers coming into the market.

The talking heads on TV and radio will give many other reasons that can be fueling the market advance and they may also be correct. Our market may be overvalued as we see it, but to others it looks like a bargain. Money is always looking for the greatest return and with wire transfers billions of dollars can and does move in a matter of hours. Oversold to the foreign market traders means underbought. It seems they have put on their buying clothes and want a piece of the action as our market is headed up - at least for a while.

Al Thomas' best selling book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter to receive his market letter for 3 months at www.mutualfundmagic.com to discover why he's the man that Wall Street does not want you to know.

top rated cleaning service Lake Forest ..

In The News:

NASA's Perseverance rover discovers shiny metallic rock on Mars that could be a meteorite from an ancient asteroid, containing high levels of iron and nickel.

Holiday scams spike during Black Friday and Cyber Monday as criminals exploit your leaked personal data. Learn how to protect yourself from fake stores and phishing.

Commerce Department proposes TP-Link router ban over Chinese security risks. Learn how this potential prohibition could affect your home network and devices.

Hyundai AutoEver America suffered a data breach affecting 2,000 current and former employees, exposing names, Social Security numbers and driver's license information.

Washington court rules automated license plate reader images are public records, even when stored by vendors like Flock Safety, setting precedent for transparency.

Fake airline texts claiming flight cancellations are targeting travelers with convincing scams. Learn how cybercriminals steal personal data and credit card info.

Discover how iOS 26's new Adaptive Power feature automatically extends iPhone battery life by learning your usage patterns and adjusting performance intelligently.

New TikTok malware campaign tricks users into running PowerShell commands that download Aura Stealer, which steals credentials and authentication tokens.

Gaia Family offers fixed upfront pricing for IVF cycles with unlimited embryo transfers and financial protection, partnering with over 100 U.S. fertility clinics.

The Jetsons Act aims to position Pennsylvania as a leader in advanced air mobility by establishing regulations for hybrid ground-air vehicles.

Fake Geek Squad invoice emails are targeting users with convincing charges and urgent phone numbers to steal personal information and money.

Fox News Digital's artificial intelligence newsletter digs into a robot in Russia that faceplanted, George Clooney's alarm and OpenAI's rivalry with the New York Times.

Major data breach at Conduent exposes personal information of 10+ million people. Government contractor hit by cyberattack affecting Medicaid, child support systems.

Texas startup Janta Power raises $5.5M for innovative vertical solar towers that generate 50% more energy than traditional panels while using just one-third the land.

NASA's twin ESCAPADE spacecraft launched aboard Blue Origin's New Glenn rocket Thursday afternoon from Cape Canaveral, beginning their journey to Mars with arrival expected in 2027.

Learn how to set email reminders on iPhone and Android so you never forget to reply again. Simple built-in features help you stay organized and on top of messages.

Discover how Apple's passkeys revolutionize Mac security by replacing vulnerable passwords with biometric authentication and encryption for ultimate protection.

New survey reveals 78% of parents fear AI scams targeting their kids, yet nearly half haven't discussed these threats. Learn why this dangerous gap exists.

Chrome now autofills passport and driver's license info automatically. Google's latest browser update adds official document support with encryption and user control.

Scammers impersonate Department of Veterans Affairs employees claiming veterans owe money, but real VA communications only direct to VA.gov or official channels.

The AltoVolo Sigma hybrid-electric aircraft flies 500 miles at 220 mph while operating 80% quieter than helicopters, featuring safety systems and compact design.

Google search scam alert: fake customer service numbers can give scammers remote control of your phone. Learn how to spot these traps and protect yourself.

Electric vehicles overtake gas cars in total CO2 savings after just two years of driving, with emissions benefits growing over time as power grids get cleaner.

Louvre Museum reportedly used "Louvre" as password for surveillance system during $100M jewel heist. Learn how weak passwords put even famous institutions at risk.

Bipartisan AI jobs bill from Sens. Hawley and Warner would require companies to report AI-related layoffs and hiring to Department of Labor quarterly.

Overvalued & Underbought

Stocks & Mutual Fund