iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
18,232 Blog Posts

Bob Doll: The Market Cannot Go Down; Earnings are Too Good

This was one of those cringeworthy moments in financial television history that I knew when I saw it, I could document it for future use in order to humiliate Bob Doll. While no one here is arguing with the merits of US earnings, I think we could all agree that it is patently absurd to suggest stocks cannot trade down, because earnings are so damned good.

Well, that’s exactly what Bob Doll just said. It’s impossible for stocks to even pullback a mere 5-10% because of the power of earnings, so you might as well mortgage out the house, leverage it up, and buy QQQ.

On the issue of earnings and free cash flow, publicly traded US companies have enjoyed about $1 trillion of free cash flow over the past 12 months, on revenues of $11.2 trillion. Total debt is around $9 trillion, most of it sequestered in the banking space, which is tricky to quantify. The total market capitalization of US companies is a little above $23 trillion. Within the free cash flow matrix, here is the breakdown per sector.

Basic Materials: -$82 billion
Consumer Goods: $100 billion
Financial: $330 billion
Healthcare: $114 billion
Industrials: $79 billion
Services: $164 billion
Technology: $253 billion
Utilities: -$751 million

In short, financials and tech make up more than half of the free cash flow generated by American publicly traded companies.

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16 comments

  1. mad marsupial

    Read my lips moment? Watch what happens if Congress doesn’t pass a tax bill….

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  2. natehois

    What does a pleb like myself do with this information

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  3. roundwego

    Sell the rip.

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    • hedge500

      They keep on talking about earnings, yet sp500 EPS is the same as it was Q2 of 2014.

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      • hedge500

        q2 2017 is the same as q2 2014*

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      • numbersgame

        In 10 years (June ’07 – Jun ’17) earnings per share has gone up 24%, while the S&P index has gone up considerably more than that…

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        • duuude

          Non GAAP earnings…ya know, what the company sorta feels like is one time horseshit

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  4. numbersgame

    I couldn’t figure out why people were willing to pay so much to *buy* bitcoins when it is so much cheaper to *mine* them.. I think I figured it out:

    https://www.bloomberg.com/news/articles/2017-12-05/mystery-shrouds-tether-and-its-links-to-biggest-bitcoin-exchange

    Short story:
    1) you give cash to Tethe (company) and they give you tether (cryptocurrency).
    2) they buy bitcoins and cocaine with your cash
    3) You ask for your cash back, they say no
    4) You buy bitcoins with your tether

    So that’s means that 2 bitcoins are bought for the price of 1. Also, they may just be printing tether the same way that the FED prints dollars. tether is most definitely a world-class scam.

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    • soupbone

      reeks badly. something will bring it down, watch for a canary to croak. there are already liquidity issues and nothing has happened. when it stalls liquidity goes to zero and the theft can be finalised.

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  5. sarcrilege

    It’s CNBC, the clown station. But there are some that actually watch it, take it seriously and buy stawks.

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  6. tonka

    Kinda like after the election when Paul Krugman said the market would never recover.

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  7. blackgld

    Bought some HMNY shares at 7.77

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