GM stock

Update: 7/21/09 – Last week the “old” GM stock was officially delisted.  The ticker symbol was changed to MTLQQ to reflect the fact that it’s now the stock of Motors Liquidation Company.  And it appears that investors are starting to understand that the stock is worthless – it’s dropped back down to about 50 cents per share.

The “new GM” officially came out of bankruptcy, and the “old GM” stock rose 38% yesterday.  That’s weird.  And very very dumb.  Here’s why.

When GM (stock ticker GM) declared bankruptcy, there was a small – very small – chance that stock shareholders MIGHT receive something for their shares.  When the government got involved and negotiated who would get what, that small chance disappeared.  The “old” GM stock is now traded under the ticker GMGMQ, and that’s what went up 38% yesterday.  The problem is that GMGMQ doesn’t have ANY assets, and when you buy it, you’re not buying anything except the stock certificate.

Here’s what GM’s investor relations page says:  General Motors Company (the “new GM”) currently has no publicly traded securities. Please note that none of the publicly owned stocks or bonds issued by the former General Motors Corporation (now renamed “Motors Liquidation Company”), including its common stock formerly traded on the New York Stock Exchange under the ticker symbol “GM”, are or will become securities of General Motors Company, which is an independent separate company.

In other words, the “new GM” is making it very clear that NONE of their old stock has anything whatsoever to do with the new company.  The old stock (and bonds) are not, and will not be transferred in any way, shape or form to the “new GM”.

And if that doesn’t make it clear enough, the homepage of the website of Motors Liquidation Company (which is the “old GM”) says: Management continues to remind investors of its strong belief that there will be no value for the common stockholders in the bankruptcy liquidation process, even under the most optimistic of scenarios.

And just in case none of this is clear to the people who are still purchasing GMGMQ stock, the FAQ page of Motor Liquidation Company says:

Q. What will happen to my current stock and bond holdings? Will I receive General Motors Company stock?

A. All of the publicly owned stocks and bonds previously issued by General Motors Corporation are still securities of that company, which has been renamed “Motors Liquidation Company,” and will be treated in accordance with the provisions of the U.S. Bankruptcy Code and the rulings of the Bankruptcy court. None of Motors Liquidation Company’s publicly owned stocks or bonds (including the common stock that formerly traded on the NYSE under the ticker “GM”) are or will become securities of General Motors Company, which is an independent separate company.

So why are some investors bidding up the price of GMGMQ?  Simple – they’re idiots.  They heard that GM was coming out of bankruptcy, so they bought what they thought was GM stock.  It’s not, it’s Motors Liquidation Company stock, and (again, according to their FAQ) it has no value.

Both the “new GM” and the “old GM” (Motors Liquidation Company) state – in no uncertain terms – that the stock is worthless.  I don’t have a brokerage account that allows me to short stocks, but if I did, I’d short GMGMQ with everything I had in the account.  It’s the easiest money you’ll ever make.

BTW – The “new GM” doesn’t have any stock for sale.  It’s 100% owned by the US Government, the Canadian Government, and the UAW.  There MAY be an IPO of stock sometime next year, but you cannot buy into the company at this time.  Although everyone in the US and Canada has in fact already bout into the company, as our governments are now the owners.

gk

Why are stocks rising?

The S&P 500, DJIA, and NASDAQ are all up about 40% from their lows on March 9th.  Why?  Has the economy (and earnings) rebounded that sharply?  Or were the March lows an aberration?  It’s been a while since I talked about the stock market or the larger economic picture, so it’s time to revisit those themes.

First, the economy.  From the data to date, it appears that the broad US economy is shrinking less rapidly than it was just a few months ago – but it’s still shrinking.  The GDP shrank at a 6.3% rate in the 4th quarter of 2008, and it shrank at a 6.1% rate in the 1st quarter of 2009.  These are the revised (as of May 29th) numbers straight from the BEA here.

Passenger: “The GDP is better than it was before Captain – can we start the party?”

Captain: “Ummm, let me think….  The ship is still sinking….  But it’s sinking at a slightly slower rate.  Re-arrange the deck chairs again, maybe that will help.  Party on dude!”

Ok, so the economy isn’t growing – what’s behind the 40% rise in stocks?  Could it be earnings?  Maybe companies have laid off enough workers, and streamlined operations enough so that their profits are 40% higher than last quarter?  Let’s look at the numbers….

With 99.43% of the Q1 2009 earnings reported, the total earnings of the S&P 500 adds up to $7.61.  That’s certainly a lot better than the negative $23.25 the S&P 500 earned during Q4 2008!  Keep in mind that Q4 was the first time ever for “negative earnings” for the S&P 500.   And another word for “negative earnings” is “losses”.  Or “deficit”.  As in “the US Government has $1.85 trillion in negative earnings for fiscal year 2009.”

Anyway, $7.61 in earnings must be a good thing if that has caused the stock market to surge about 40% in the past 3 months right?  According to Standard and Poors latest spreadsheet, no.   Except for last quarter’s losses, As Reported earnings haven’t been this low since Q4 of 2002.  And the Operating Earnings (currently $10.15) haven’t been this low since Q4 of 2001.

Ok, so actual earnings aren’t driving the market higher – what if the earnings are low, but beating the estimated earnings?  In other words, what if company earnings suck, but they suck less than investors expected them to suck?  Sorry Charlie, according to Howard Silverblatt, S&P Senior Index Analyst, “actuals are -24.3% off estimates, and -43.5% behind last year”.

Of course, Howard goes on to say that the “Operating vs As Reported (top down vs bottom up) varriance enormus; out of the woods or the Island has moved.”  I’m not sure what it means when the Senior Index Analyst at Standard and Poors can’t spell “variance” or “enormous”, but it can’t be A Good Thing.

In the same note, Howard also says “189 issues beat est, but only 87 beat last years earnings; 290 missed with 72 beating last years EPS” which translates (seriously) to “189 out of the 500 companies in the S&P 500 beat their earnings estimates.”  189 out of 500 is about 38% – that means that 62% of the S&P 500 MISSED their earnings estimates.  And yet the stock market is 40% higher.

Ok, so maybe the forward PE ratio is finally coming down to reasonable levels?  It was at a record 60 to 1 at the end of Q4, it must be better now….  Or at least when we look at the estimates for the rest of the year….  Right?

Wrong.  The current PE ratio for the S&P 500 is 114.77, another record high.  And it gets even worse when you look ahead.  Here are the current estimated PE ratios for the S&P 500 for the rest of 2009.

• Q1 – 132.22
• Q2 – 3513.31 !
• Q3 – Negative 301.52 (first negative annual PE in history)
• Q4 – 33.46

To sum it up, I see no reason for the current level of stocks.  Zero.  The S&P 500 index (currently at 944.74) is too high relative to earnings – and in the long run, stock prices are based on earnings.  This minibull may continue for awhile, but prices WILL eventually adjust to the low earnings.  And from where I sit, that means stocks will drop back down to at least the March low sometime this year.

The only possible way I can see stocks continue to rise is inflation.  Specifically, inflation caused by the enormous amount of money the Fed is printing out of thin air and injecting into the money supply.  In that case, stocks can – and will – go higher.  But the actual price increase will be close to zero when adjusted for inflation.  And if you want to maintain your purchasing power, gold and silver (in your physical possession, not an ETF!) are, in my humble opinion, much better inflation hedges than stocks.

I could go on and on about how Geithner, Helicopter Ben Bernanke, a willing Congress anxious to be seen as “doing something”, and Obama are making the mess worse – just as Greenspan, Bernanke, Bush, and a willing Congress created the problem – but that’s another story for another day.

gk

The Year of the W

I was browsing through MarketWatch.com tonight and saw this story from Todd Harrison.  If you’re unfamiliar with Todd, he’s the founder of Minyanville.com, and he caused an uproar in the trading community last year when he announced that he had moved 100% of his long term money into cash.  The Dow was at 11, 346 when he said that.

Back to the story.  Today Todd says that he thinks a chart of 2009 is going to look like a “W”, and that “We’re currently dancing around the middle spike“.  In other words, the current spike in stocks is just a spike, and it’s going to head lower again.  I agree.

To explain his reasoning, Todd says “The market has room to run in the context of the lower highs that define a bear market. The first test will arrive around S&P 950, which is dual resistance in the form of the 200-day moving average and the one-year downtrend.”

The flies in the sustained recovery ointment are two-fold, which is why I’m of the view that this is a bear-market bounce. First, rampant inflation requires legitimate demand for goods and services coupled with the healthy velocity of money, neither of which can be artificially manufactured by the litany of government acronyms or tough talk from the Beltway.

Second is the unavoidable reality that the cure for an imploding debt bubble isn’t the inducement of more debt but rather the destruction of it. That is the single greatest flaw in the “all-clear” thesis; we’re swimming backwards against a growing tide of credit dependency and the cumulative imbalances that have built since the turn of the century.

Employment is still dropping, housing prices are still dropping, earning are still declining.  I see no reason to buy back in at this time.

gk

Buy and hope?

Wanted to pass along this story from Yahoo Tech Ticker.  It’s titled Don’t ‘Buy and Hope:’ How to Survive Until the Next Bull Market.

With the market heading lower again and the Dow hitting yet another new 11-year low intraday Friday, it’s hard to believe stocks will ever be a good investment.

But “there’s a bull market in our future,” says John Mauldin, president of Millennium Wave Advisors.

That’s the good news.

The bad news is Mauldin, who selects active fund managers for his high net worth clients, says any 1990’s-style bull market that rewards passive index funds and “buy and hold” investors is unlikely to arrive before for another five-to-six years.

I don’t know about waiting 5 or 6 years until the market turns around (I haven’t thought that far ahead) but I like the term “buy and hope”.   Just saying.

gk

More bottom fishing on stocks

You’d think that the “experts” would eventually learn, but when I scan the news lately, almost everyone and their brother is calling this the bottom of the bear market.  If they’re not outright calling a bottom, they’re saying “near the bottom” or something similar.

Just today I ran across these stories saying that we’re at or near the bottom in various markets.

• CNN – Have banks finally hit bottom?
• Reuters – Calif housing market may be near bottom: JPMorgan
• The Motley Fool – Amazon Calls the Market Bottom
• Zacks.com – Agrium Bid: Bottom for Fertilizers?
• The Wall Street Journal – Have We Hit Bottom? Answers Short and Long

That’s today alone!

I think they’re nuts.  They’re fruitcakes who haven’t actually taken the time to look at the numbers – or even a chart.  And as I see more people calling a bottom, I’m more sure that this isn’t the bottom.  When the bottom is truly here, almost no one will call it.  Including me.

I’m not pessimistic by nature, but I don’t see any signs of a bottom in any of the major markets.  The forward estimated P/E ratios are still sky high, and they need to drop.  P/E ratios go down either by lowering the price of the stock (the “P”) or raising the earnings (the “E”).

Since earnings targets are lower each day and still aren’t being met when companies report, I don’t see a scenario where the “E” is going up anytime soon.  That means the “P” must drop.

My conclusion is that this isn’t the bottom.

gk

What do great investors say?

I listen to the Dave Ramsey show everyday – well, as much of it as I can while driving home from work.  Dave is a smart, common sense guy, and he says a ton of stuff that I agree with wholeheartedly.  You will not go wrong if you follow his advice, and I strongly urge you to listen to him (podcast available on website) and to check out his website at DaveRamsey.com.

Let me put it this way, if more people had listened to Dave and followed his advice, this current financial crisis would not have happened.  The current crisis (I keep saying “current crisis” because the government ALWAYS has some crisis – it’s the way they convince you to go along with stupid ideas that you’d normally spit on) was caused by government policies which encouraged people to borrow too much money.  Period.

Dave has always encouraged (and encouraged is too mild of term!) people to get out of debt.  All debt.  No exceptions.  And he gives great practical advice  on how to do it.  His plan works, and it will also eliminate those fights about money with your spouse.  I know from experience, because my wife and I get along much better since we started following a written budget.

Go to his site, download the podcasts, listen to him live, whatever works for you.  But you need to listen to him and follow his advice.

After having said all of that, there are two things he says with which I disagree.  This is not meant to antagonize anyone, but simply to say that I don’t think Dave is 100% right on his advice.

1. Dave is a Christian, and he encourages people to tithe literally.  10% off the top to your church.  (I’m a benevolent Atheist, who thinks that religion is one of mankind’s greatest vices.  But that’s my opinion, you are free to practice whatever faith you wish.)
2. Buy and hold investing.  (See my previous post Bye-bye to buy and hold for the basics of why I disagree with that philosophy.)

The point of this post is not to point out the area’s with which I disagree with Dave, but to talk about something he posted on his website today.  He posted a link to a report called “The Wisdom of Great Investors” which supports his long term buy and hold advice.  (I assume it’s all about buy and hold from skimming through it.  If it is what it looks like, I’ll post again and tell you why I think they are wrong.)

On a side note, I admire Dave Ramsey for “practicing what he preaches”.  The report is free, and neither he nor the company who allowed him to distribute it are making any money off of giving it away.  Dave said that he doesn’t have any relationship with the company, and I believe him.

In case it’s only on his site for a limited time, you can also read the report here.  The Wisdom of Great Investors.  (Since they’re distributing it free, I assume this is ok.  If Davis Advisors asks, I will remove this link since it is their report.)

But I’m going to read the report later and not simply tell you what I think is wrong in it, but why I think it’s wrong.  After all, if I simply state an opinion, so what?

But if I can explain the reasoning behind my opinion to you, maybe I’ll convince you that I’m right and change your attitude and behavior regarding investing.  And that will lead you to change your attitude and reasoning towards money, which will lead you to change whatever monetary theory (if any) you currently hold, and perhaps I’ll eventually convince enough people that we can change the government back to something approximating what the Founders intended it to be.

I know it’s a long shot, but I have to try.  One step at a time, I hope to get people to think rationally, and not simply instinctively react to what happens.

gk

Bye-bye to buy and hold

As if the past few years haven’t been proof enough, the recent plunge in stock prices may finally shut up the chorus of buy and hold investing proponents.  I’ve been saying it for a long time, but maybe hitting people in the pocketbook is the only way to make them understand.

Buy and hold is dead.  It has been dead since the tech bubble popped in 2000, but people just didn’t realize it because Alan Greenspan created the real estate bubble to replace it.

When the S&P 500 index peaked at 1527 in March of 2000, it took until May of 2007 to see those levels again.  7 years of “experts” preaching “buy and hold”, “stay in stocks for the long term”, “you need to be fully invested in stocks if you’re a long term investor”, etc, etc, etc.

The amazing part is that people listened to the “experts” – and followed their advice for 7 years of negative returns on their money.  I’ll put it another way.  If you put $1000 into the stock market in 2000, you didn’t break even until 2007.  0% return.

If you put $1000 into the stock market before or after 2000, you might have had some return on your money depending on when you invested, but you didn’t have much.

With the market close today, you’ve lost money if you bought into the stock market at anytime since April of 1997.  I’m no math wizard, but I know this is February, 2009, and April 1997 was 12 years ago.  That’s a long time to wait just to break even.

Since the late 80’s, I’ve followed a simple strategy that the “experts” kept saying was a losing strategy – I buy when the 75 day EMA crosses above to 200 day EMA, and I sell when the 75 day EMA goes under to 200 day EMA.

It’s an extremely simple strategy for long term investments like 401k’s and other IRA’s.  You don’t move in and out of the market very often, but you’re in the market when stocks are rising, and you’re out when they’re falling.

As a result of following this strategy, I got out of stocks in January of 2008 when the S&P 500 was still over 1300.  I didn’t get faked out by the false bottoms during 2008, and I’m still in cash and bonds.  My money is just setting there, waiting until the 75 day EMA turns back up and crosses over the 200 day EMA.

This strategy will beat the snot out of buy and hold, and it’s extremely easy to follow.  You can check out a chart of it here on Yahoo Finance.

Maybe the “experts” will finally shut up – or better yet – maybe people will learn to make their own decisions about investments.  When you do, don’t be surprised if you start realizing that the “experts” also don’t understand capitalism and free markets.  Read other posts in this blog if you’re curious about those subjects.

gk

Listen to experts – and go broke

While reading through the news today, I saw several articles and stories talking about how now is a good time to buy stocks.  I’ve been reading this same type of story since mid 2007, and there’s one thing they all have in common – they’re all wrong.

They’re wrong because the “experts” the writers quote in the stories have incorrect assumptions about the current situation.  Most all are assuming that this is a typical mild recession, that makes for a quarter or two of bad earnings, then stock prices resume their upward march.  They make this assumption because that’s how stocks have behaved (for the most part) since the early 1980’s.

But this is not a typical recession because the problems with our economy are structural.  It takes much longer to work through structural problems than a typical business cycle downturn where nothing long term is really wrong.  Structural problems go deep, and they require massive destruction of debt in order to re-establish a strong financial base from which to start building again.

Here are a few links to news stories from the past couple of years.

An Alarm Is Blaring: Time to Buy (NY Times, May 18,2008) The S&P 500 index is down over 40% since then.

Why you should be buying stocks now (Money Magazine, Dec 3, 2008) S&P 500 down over 10%.

International experts aren’t faring any better – especially Anthony Bolton in England.

Anthony Bolton: Why now’s the time to buy (UK Telegraph, Jun 10, 2008) FTSE 100 down over 30%.

The same basic story was re-run on Oct 6th.  Anthony Bolton: Why now’s the time to buy FTSE 100 is down over 15%.  Hey Anthony – if you keep saying it, eventually you’ll be right.  And most people will forget all times you were wrong!

Back to the US.

Resist the Impulse to Panic Over Finances (NY Times, Mar 22nd, 2008)   S&P 500 down over 40% since then.  Also, I wonder what Mr Tysk is doing these days?  Anyone who actually took his advice has lost 40% of their money.  He said “Small investors always make the worst timing decisions because emotion is involved,” Mr. Tysk said. “This is precisely the wrong time to move to safer options. The stock market has dropped dramatically and now is the time to invest — don’t close the stable door after the horse has left.”

Just a couple of weeks ago, The NY Times ran a story titled Why Analysts Keep Telling Investors to Buy and there were lots of reasons given.  But basically it boils down to the market goes up long term and you need to be in the market.  That advice is just as wrong  today as it’s been over the past 18 months.

It’s wrong because the market doesn’t always go up, just as people have now realized that housing prices don’t always go up.

I don’t claim to have a crystal ball for stock prices – hell, I bought Nortel 3 years ago at $3 because it was “cheap” and now they’re broke and I lost that money.  But I’m tired of stories saying that “no one predicted this” and “the depth of the financial crisis was missed by everyone” because it’s wrong.

I predicted this back when I first started this blog.  One of my earliest posts was Another Prognosticator Oops! where I gave my opinion on what was going to happen.  That was in January 2008, and I said I think it’s waaay to soon to be looking at this sector.  Personally, I think we’ll see a couple of big bank failures before the financial house of cards has collapsed fully.

We won’t be at the bottom until the losses are all acknowledged and reflected in the balance sheets and earnings.  I’ve lost track of how many times I’ve read where companies are throwing in the kitchen sink in an attempt to get all the bad news out there and move on.  But yet they haven’t.  Losses continue to pile up – in fact, they’re accelerating at this point.

This was the first quarter ever that the S&P 500 had no earnings.  The aggregate losses at this point are over $10/share.  It’s impossible to do a P/E ratio calculation on the S&P 500 because there is no E!

With the benefit of hindsight, it may turn out that right now is an excellent buying opportunity, but I don’t think so.  Based on the predicted earnings for the next 12 months, stocks are still about 40% too high.  The S&P 500 should be about 550 right now in my opinion.  So either earnings have to go up dramatically, or prices need to fall.

What do you think is more likely? 🙂  I don’t see higher earnings forecasts for many companies this year, do you?

gk

Are stocks cheap?

CNN seems to think stocks are cheap right now.  Really.  A story this morning is headlined New lessons from the crash and the lead in says  Finally, stocks are cheap. Really. So it may be time to break the rules – just a little – to take advantage of this opportunity.

The story goes on to say that the P/E ratio is now really low, in fact, they say the market crash has made stocks genuinely cheap. In fact, the price/earnings ratio on the Standard & Poor’s 500 has sunk below its historical average of 16 for the first time since 1991, which just so happened to mark the start of one of the greatest bulls ever.

To which I say – WTF are you smoking at CNN?  Right now, it doesn’t matter what the “P” is, because there is no “E”!

As I documented this weekend, earnings for the S&P 500 are – well, there aren’t any.  Only losses.

If you bought one share in each of the S&P 500 companies and added up all the per share earnings, you end up with a negative number – otherwise known as losses.  That number currently stands at -$10.44 per share.  That’s $10.44 of losses when you add up the earnings of 500 of the largest companies in the US.

To be fair, CNN is using a 10 year average for their earnings number, and yes, if you look at it that way, stocks are cheap. But look at it this way – Bear Stearns, Wachovia, and Lehman Brothers all had great 10 year earnings averages last year at this time – would they have been a good buy?  No, they simply provided a fast way to say goodbye to your money.

Hmmm…. Gonna have to use that as the title to a story sometime “Good buy or goodbye?”  Kinda catchy….

But when you use a forward estimated earnings figure (what’s in the past is history and doesn’t matter if the company goes broke next month) stocks are very expensive – as in a P/E ratio of about 30.

As I said in the previous post, I think either earnings need to double (one year trailing earnings) or the price of stocks needs to drop by at least 30% to 40% to get back to a decent ratio.  And this is all meaningless if earnings are still negative next quarter.  In that case, prices are dropping big time.

That’s what I think is happening.

gk

S&P 500 earnings in the tank

It’s been about a week since I posted an updated earnings report for the S&P 500, and there are a few new items.

By far the biggest item is that S&P is now recognizing that Q4 earnings – well, there aren’t any.  This will be the first quarter ever where the 500 companies (which make up the S&P 500) total earnings add up to a negative number.  Normal people call this a loss, but brilliant economists say “negative earnings” as a euphemism.  I guess they think it sounds better than saying losses.

The latest update from S&P (link opens an Excel spreadsheet) has this in the notes at the top:  As Reported earnings are negative for the quarter, with or without Financials. Previously, the financial sector was blamed for the losses, but they’ve finally realized that most everyone’s earnings are in the tank, and that aggregate earnings are non-existent – even when you exclude the financial sector.

They also say House cleaning should be massive enough to keep first half of ’09 clean of ‘items’, after that it depends on the economy.

The problem is that they’ve been saying this since Q4 of 2007.  Every time earnings are lower than expected the analysts have said “this is the kitchen sink quarter” meaning that they think the companies have cleaned house and reported every possible thing that could be bad.  And they’ve been wrong every quarter.

They’ve been wrong because the companies themselves don’t know the extent of their losses, because they don’t know how much more they’ll need to write down because the value of their assets (mainly various derivatives of mortgages) are still declining.

Another note that should give you pause is With 84.8% of the market value and 390 issues reported, operating earnings are -62% below Q4,’07.   So even excluding everything that they claim are one time losses (which show up in the as reported earnings) operating earnings are less than half of what they were the same time last year.

On Dec 31st, 2007, the S&P 500 closed at 1468.  Here’s a fun game to enable you to calculate an equivalent price (based on operating earnings) today.  Simply adjust the 1468 close last year by subtracting 62%.   1468 – (1468 x .62) = 557.97. It isn’t difficult.  Based on this, the S&P 500 should be in the neighborhood of 500 to 600 right now, but yet it closed Friday at 826.

In other words, the S&P 500 index still needs to drop another 260 points (about 30%) from the current level to be priced the same as last year.  I thought the indexes were too high last year, and I think they’re still too high.  We are not at the bottom of this bear market.

Look at the spreadsheet in the link above.  Look at cell H35 where it shows the current trailing P/E ratio.  It’s freaking 30!  Waaay too high.  Either earnings need to double or stock prices need to fall.  Which do you think is more likely in today’s environment?  I think stock prices will fall.  I don’t know when it will happen – but it will happen.

At least S&P has FINALLY lowered their insane $81 estimate for 2009 earnings – dropping it all the way to $32.  Even that’s a jump from the (estimated) $27 the S&P 500 earned on 08.  Just another reason that I think the market still has a ways to drop.

More fun with math – try calculating a P/E ratio for the Q4 earnings alone.  The math is really simple.  Take the closing price on December 31st and divide it by the as reported earnings.  Here’s the formula:  903/–10.44.   Don’t forget the minus sign!

What’s that you say?  You say it shows a negative number?  Weird ain’t it.  It’s never happened before.  If you want to play with the spreadsheet a bit, try this.  Divide the result you just got (–86.52) by 4.  That will give you a P/E ratio closer to numbers that you’re used to seeing, except it’s a negative number of course. -21.63 to be exact.  That’s the current (instant?) P/E ratio of the S&P 500.

Now try it for historic prices and earnings.  When I do this with the S&P spreadsheet going back to 1988, I get a wide range of numbers, with the lowest being 10.65 (in Q3 1988) and the highest being 73.32 in Q4 of 2002, and an average of 23.17.

The current number (-21.63) blows away the previous low.  There are no earnings right now – only losses.

I want to quote another comment from the spreadsheet: As Reported short-term P/E (column H) higher than the bleachers at Yankee Stadium.  And Talk of second half ‘turning the corner’ now second half / early Y2KX (2010)

In other words, prices are too high on a value basis right now, and the estimates for the economy to bottom out have been pushed off into late this year or next year.  They say the stock market is looking ahead 6 to 8 months.  Those who were hoping for a rebound in Q3 are going to be disappointed.

gk