Forward P/E's And Some Random Thoughts

How about a check on some higher growth stocks and their forward PE's:

* AAPL - This stock less cash has a forward in the 12's and a PEG under .50.
* MSFT - Less cash MSFT forward is about 10.5, and it is a dividend payer.
* INTC - after cash INTC is under 10, about 9.65.
* ADS - forward is just over 8.
* BAC - it's 7 on EPS that is probably severely conservative.

I could type this up for hundreds of stocks (maybe thousands). And remember, that valuations never signal a bottom or top in the short run.

I think this is the last "bad" jobs report (bad according to many reports). But actually, this report was pretty darn good. 20k jobs lost is huge compared to where we were 6 months ago and longer.

I think we see anywhere from 400-600k jobs added over the next six months.

This market is still in transition. From a market where US stocks can't rise if the USD does, to a market that may just end up doing better with a stronger USD.

The relative value tech correction is approaching 20% now - given the drop in stock prices combined with the increase in earnings.

Little noticed of late is how much cash flow and book values have increased over the last 2-3 quarters....

There was a Bloomberg story about new SEC short sale rules and circuit breakers. If they come, I hope they are a lot more similar to the original uptick than the "modified" uptick rule.

Today I'm pleased to hear and see a litany of attacks on the CDS market. Again, market rules are huge and structural imbalances due to leveraged derivatives have been the root or greatly exacerbated many financial crises -- these include the 1987 portfolio insurance, 1997-1998 contained issues with global currencies, Long Term Capital, Orange County, and everything that happened during the 2008-2009 market lows.

Again my view is much of the CDS market is essentially illegal since they are in violation of the most basic insurance principle -- insurable interest. There are very good reasons that not just anyone take out large life insurance policies on people they have no connection with. Just imagine a world where we all needed to monitor how many life policies there were outstanding against us and what that total value was. Can you just imagine the fear we would face knowing that say, 2000 people had a net total of $250mm to gain upon our death. Given that, how long would our life span be?

BRCM had a blowout. Loved that quarter and I think the guide was conservative. Now with charges out of the way the earnings power of BRCM should come through. Operating cash flow was very strong and accelerating.

I still think QCOM's report was much better than the post stock reaction. Can't anyone else look past a quarter and see what QCOM might be doing in 6 months, or a year or even 2 years?

Why are there sellers of RMBS here? I just don't get this; I think this could double again.

As for banks, this pullback is big, making the upside that much bigger. The writedowns are diminishing, which is going to be the next big story for them.

long AAPL