re: Jamie Dimon - Why Would He Say This

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I'm not trying to find a bottom. It's a decent metric to judge how expensive the market is though. I think it says the market isn't significantly undervalued right here from a historical perspective.

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You implied you were holding off on buying because the P/E is still above 15. All I’m suggesting is that if you look back to previous market cycles, there isn’t all that much correlation with current P/E and 1 year or so returns.



P/E is something, but you should really avoid trying to predict much from a backwards looking metric.

Full disclosure though - forward P/E is also a terrible predictor of 1 year returns, but it’s much better at 5 year returns. Also, because it’s based on future earnings estimates, it can help smooth out the the crazy trailing P/E you get in big market downturns like dot com and 2009.

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I think we see 3100 or so on the S&P as is with no deep recession.

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Tommorrow's CPI number will tell whether we get a nice rally or more downside. 8.1 is the expectation. If it comes in at 8.1 or below then rally. If it goes above that or back to 8.3 then S&P easily slides 3100. It will take more than one CPI reading to change the course of the market but any positive news i see a short term rally.

It looks to me as if the financiers are in a full media press to pressure the Fed to pivot. They’re all out saying the same th8ngs….pain on the horizon, the Fed went too fast, going to destroy the economy, etc.

There may be some truth to this but make no mistake, these guys profit from asset bubbles and inflation. They’re looking out for their own self interests.

The fact is ther has to be a correction of some sort and it’s going to suck. 8% inflation every year is unsustainable and if something isn’t done now it will be worse in the future.

Since last quarter, estimates have been revised down about 4% going into this Q3 earnings season. It's going to take a lot more than 4% to justify S&P hitting these low targets/20% declines from these levels.

It's very gloomy heading into Q3 earnings and possibly setting a low floor for expectations to be beat (a repeat of Q2). They probably won't even be that bad yet since consumers are still spending. I'm betting the majority (70-75%) will continue to beat, but banks will be clapped hard.

Everyone should short JPM before Friday since Dimon is bearish

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Everyone should short JPM before Friday since Dimon is bearish

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I’m short JPM 94 10/14 puts. I’ll take it at that price if they hit. But the probability is pretty low at this point.

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If those happen... another 20% drop is very possible.

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Maybe, but the market is supposed to be forward looking, so historically I believe the market generally does bottom before recessions (at least typical recessions, not sudden, unexpected shocks).

So I think given that we haven’t seen that, and it’s down quite a bit, at least some of that is priced in. Plus the other issue is obviously rising interest rates, so a recession would drive interest rates back down, so that would at least blunt the impact, if not reverse it.

Maybe it’s just wishful thinking, and I would prefer no recession, but I at least hope it’s generally bottomed out even if there is one, either because it’s priced in and/or because it will lead to lowering interest rates.