Thursday, October 22, 2015

All Is Well!

We can officially stop sounding the alarms and relax.  The near demise of the world economy is over.  All is well my friends.

The DOW was up a whopping 320 points, Draghi is telegraphing more QE and lower rates in December in the EU and - drumroll please - after hours shares of Amazon, Google, AT&T and Microsoft are all up on better than expected earnings!!  Oh, happy days are here again!

Heck, Amazon has now even shown a profit for a whole two quarters in a row!  A whopping $79 million this past quarter for a company with a mere 677 million shares outstanding.  Why if they can repeat this feat quarterly, they could show in the future profits of $320 million a year, which is over 50 cents a share!!  More than enough to justify a stock price of  over $600 after hours making Mr. Bezos the third richest man in the U.S. and fifth richest in the world!!

http://www.bloomberg.com/news/articles/2015-10-22/bezos-leaps-to-third-richest-in-u-s-as-amazon-sales-beat-target

He is now worth a nice $55B.  And at its current pace, his company will only take a little over 171 years to make that much profit.  Indeed, through the wonders of math, we can determine that at a pace of $79 million a quarter in profit, if every single penny of profit were to be distributed to shareholders they would receive an amount equal to the stock price in a mere 1200 years, give or take a decade or two.  Wow, that is most impressive!  Makes me reminisce about the good ole days.  You know, 2000.  Ah, now those were P/Es back then.  Mostly negative but outstanding to say the least.

Yes, put away those silly worries of a downturn and break out the champagne! 

10.23.15 update:  With the S&P up again today, you savvy investors once again have bragging rights.  Yes, at this point year-to-date you have not lost any money on average in the S&P!  Yeah team, we're breaking even!

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