Comfort Zone Investing: Why the Next Rally Could Be a Monster

Filed under: Google (GOOG), Microsoft (MSFT), Intel (INTC), International Business Machines (IBM), Comfort Zone Investing, Housing

While the stock market has moved up nicely in the last three months, it's hardly moved stocks above reasonable valuations. IBM (IBM) sells at 12.77 times earnings. Intel (INTC) goes for 11.67 times. Microsoft (MSFT) has a price-to-earnings ratio (P/E) of 11.74. Google (GOOG) sports one of 22.8, but even that isn't too noteworthy when many of these stocks at one time or another traded at 50 to 100 times their earnings. Of course, those were days when there was only up, and everyone was on Ecstasy. Thankfully, every stock, and everyone, is back on earth.

Those relatively benign valuations come from the reality of a slow global economy. In the U.S. it's more like a smashed-into-a-brick-wall economy. No matter the degree of the economic slowdown, all investors are cautious, not willing to bid up stocks when they believe things will only get worse, that profits will only decrease.

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Comfort Zone Investing: Why the Next Rally Could Be a Monster originally appeared on BloggingStocks on Sat, 02 Oct 2010 10:30:00 EST. Please see our terms for use of feeds.

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