Monday, March 9, 2009

Roubini Adjusts His S&P Target To 600

In a slightly less pessimistic statement today, Nouriel "Dr. Doom" Roubini said an S&P level of 500 "is less likely, but there is some possibility you get there" and put his S&P target at 600. Roubini's target is based on an S&P 2009 earnings of $50 and a 12x multiple. "My main scenario is that it is highly likely it goes to 600 or below" Roubini said in an interview at the CBOE Risk Management Conference in Dana Point (which one presumes did not have any Citigroup employees present).
“Even if you do everything right with fiscal and monetary policy, we’re still going to be in a recession through the end of this year and into next year,” Roubini said earlier during his speech at the options-industry conference. “The recession train left the station over a year ago, and it’s going to continue.”

Assuming Roubini's 12x earnings multiple is appropriate for the economy, one may be tempted to use Goldman Sachs' top down 2009 estimate of $40 and end up with a 2009 S&P target of 480, although if the market does drop to that point it is safe to say all bets are off.

Roubini's full CNBC interview below.



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8 comments:

TraderMark said...

thats reassuring ;)

TheBoogieMan said...

Tyler,
If you had 250K in fresh money right now, Where would you put it?

Anonymous said...

Ahh, I love the smell of napalm at 4:00PM in the afternoon.

Advant Guard said...

I hate when I am more bearish than Roubini. S&P 500 to 450. A 12 multiplier is too high for a bear market bottom (unless he thinks the bottom will be next year and his 600 is a trading range through the rest of this year.)

Anonymous said...

Tyler,
If you had 250K in fresh money right now, Where would you put it?


I believe Stearns & Foster has a good program

Anonymous said...

buy a million shares of a 25c stock and go to the next shareholder meeting and make hay about you owning a million shares. it'll be worth it even if the POS goes to zero.

Tyler Durden said...

stearns and foster is owned by Sealy (ZZ) which is, ironically, on the verge of bankruptcy

Anonymous said...

Tyler Durden said...
stearns and foster is owned by Sealy (ZZ) which is, ironically, on the verge of bankruptcy

All the better. Get the S&F on sale......