More by the Same Author
2012-07-02 00:00:00 Nightmare on Wall Street: This Secular Bear Has Only Just Begun by Ed Easterling of Crestmont Research
Secular bull markets are great parties. Investors arrive from secular bears really wanting to take the edge off. As the bull proceeds, above-average returns become intoxicating. By the time it is over, the past decade or two has delivered bountiful returns. In contrast, secular bears seem like hangovers. They are awakenings that strip away the intoxication, leaving a sobering need for an understanding of what has happened.
2011-08-03 00:00:00 Converging On The Horizon by Ed Easterling of Crestmont Research of Advisor Perspectives (dshort.com)
By the end of this year, the earnings cycle is likely to be well above its typical thresholds of duration and magnitude. Although earnings could again rise in 2012, the magnitude of excess margins portends a fairly significant decline when the earnings cycle reverts. In addition, the profile of cyclical cycles in the stock market may have also run its course. The market may sustain or extend its gains for 2011 by year-end, but another up-year in 2012 would make history. Not only is duration stretched, but also the magnitude of cumulative gains has now matched the historical average.
2011-05-18 00:00:00 Beyond The Horizon: REDUX 2011 by Ed Easterling of Doug Short
Rather than rehash old ground, this article will provide a speed-round of charts and limited commentary to explain the current conditions and the expectation for an earnings decline within the next few years. Once again, since the fundamental principles of the business cycle cause history to repeat itself, a decline in EPS should not be beyond your horizon!
2011-05-17 00:00:00 What 'Secular Cycle' Means by Ed Easterling of Doug Short
There is a skeptical gremlin perched on the left shoulder for many investors. He often sneers at notions of "cycles" and other presumably predictable periods. When the word "secular" accompanies the word "cycle," that gremlin becomes even more scornful. Why do we use the term "secular cycle" with the stock market and what does it mean? Figure 1 presents a view of the stock market over the past century. You will note periods of above-average returns (i.e., the green bar periods) and periods of below-average returns (i.e., the red bar periods).
2011-05-03 00:00:00 P/E: Future on the Horizon by Ed Easterling (Article)
Most people expect P/E to measure current valuation and to show historical patterns. But more features are available from some versions of P/E. The methodology behind the Crestmont P/E enables investors to anticipate the future. It may not precisely predict the market ten years away, but it frames within a relatively tight range the likely outcome. One component from determining the Crestmont P/E is a means to assess the future trend line for EPS using estimates of future economic growth (GDP).
2011-03-22 00:00:00 Consensus: Groundhog Decade for Stocks by Ed Easterling (Article)
Just as Bill Murray woke up to the same thing day after day in the movie 'Groundhog Day,' it's likely that your outlook foretells a groundhog decade for the stock market that will repeat its near-breakeven returns from the past decade.