As of Friday the consensus estimate for 2009 per-share earnings, according to Thomson Reuters, was $82.60 for the S&P 500.(it was $89.21 a few weeks ago).
Still high in comparison to Standards&Poor itself which is now forecasting $67.56.
When it comes to knitting though best to go with Goldie, who first went to $65 a couple weeks ago.
As posted here on November 20th:
Government Sachs is calling for 2009 S&P earnings to be $65.
Overlaying this earnings forecast with previous bear market bottoms results in:
1974 low of 7.9 P/E returns (2008/2009)+ S&P low of 514.
1982 low of 6.6 P/E returns (2008/2009)+ S&P low of 429.
1932 low of 5.6 P/E returns (2008/2009)+ S&P low of 364.
Pick your poison but realize that the brew is hemlock not koolaid.
As the rally monkeys eat poisoned bananas snapping up all things infrastructure it should be noted that although during the Great Depression over 75% of GDP was government spending the only 'shovel-ready' really happening here is on the Street.
Stocks will bottom when no one cares about stocks anymore. Folks will be less concerned about calling bottoms and more concerned about saving their own.
The term 'buying opportunity' along with other banalities ingrained into our culture will be thrown on the collective bonfire.(hopefully)
For my part I look forward to being a long-term investor again ... at levels 50% down from here.
If I am wrong, I lose only opportunity and not capital.