Will We Hold It Wednesday – Russell 2,200 Edition (again)

The 2,200 line.  

After shooting up to it last Winter on a stimulus-fueled 50% run, the Russell kind of lost interest in going anywhere this year and, once again, it's looking to prove itself on one side or the other of the 2,200 line.  Perhaps that's because despite the Russell having a forward (dreamland) p/e ratio of 30 at 2,200 – it has a trailing (reality) p/e ratio of 642 times earnings.

That's right, even after ingesting $3Tn (15% of our GDP) of stimulus in the past 12 months, even with ultra-low interest rates from the Fed and all those SBA loans and even with all that free money given to their customers – things are still not going so great for the small-caps.  By comparison, the Nasdaq is trading at 35 times trailing earnings (still ridiculous) and the S&P is at 29 times trailing earnings with forward estimates at 30 and 22 respectively – though I can't see the S&P possibly improving that much in 12 months.

Dividends are down 20% on the S&P 500 this year – not good for people who invest to get dividend income during inflationary times.  Another sneaky way we all got taxed this year is on our Life Expectancy, which is down 1.8 years for 2020 – so we've been "taxed" 2% of our lives thanks to Trump's amazing handling of the Covid crisis, the environment, etc.  Not that it will matter much in 100 years, when everyone's life expectancy will be closer to zero, the way this planet is progressing.  

The drop was 0.3 years more than that of provisional estimates released in July 2021 and remains the biggest life-expectancy decline since at least World War II.  Covid-19 was the nation’s third leading cause of death last year, behind heart disease and cancer, and was the underlying cause in about 351,000 deaths, the new figures show. Increases in mortality from unintentional injuries—which include drug overdoses – as well heart disease, homicide and diabetes also decreased life expectancy.

So happy holidays – enjoy Grandma while you still can!  

China Evergrande will put coal in the stockings of investors, who loaned the developer over $300Bn as the Chinese Government has taken over…

You must login to see all of Phil's posts. To read the rest of this article now, along with Phil's live intra-day comments, live trading ideas, Phil's market calls, additional member comments, and other members-only features - Subscribe to Phil's Stock World by clicking here.
To signup for a free trial membership, click here.

Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!