{"id":12857740,"date":"2026-02-11T08:23:57","date_gmt":"2026-02-11T13:23:57","guid":{"rendered":"https:\/\/www.philstockworld.com\/?p=12857740"},"modified":"2026-02-11T08:48:05","modified_gmt":"2026-02-11T13:48:05","slug":"will-we-hold-it-wednesday-nasdaq-25000-edition","status":"publish","type":"post","link":"https:\/\/www.philstockworld.com\/2026\/02\/11\/will-we-hold-it-wednesday-nasdaq-25000-edition\/","title":{"rendered":"Will We Hold It Wednesday? Nasdaq 25,000 Edition"},"content":{"rendered":"<p><iframe loading=\"lazy\" title=\"YouTube video player\" src=\"\/\/www.youtube.com\/embed\/qoM5E2ijwyY?si=7t2ROhoB8y8EOb-V\" width=\"800\" height=\"400\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p style=\"padding-left: 80px;\">&#8220;<em><strong><span style=\"font-size: 16px;\">This is your Captain &#8211; we are going down.<\/span><\/strong><\/em><br aria-hidden=\"true\" \/><br \/>\n<em><strong><span style=\"font-size: 16px;\">We are all going down, together.<\/span><\/strong><\/em><br aria-hidden=\"true\" \/><br \/>\n<em><strong><span style=\"font-size: 16px;\">And I said: Uh oh!<\/span><\/strong><\/em><br aria-hidden=\"true\" \/><br \/>\n<em><strong><span style=\"font-size: 16px;\">This is gonna be some day.<\/span><\/strong><\/em><br aria-hidden=\"true\" \/><br \/>\n<em><strong><span style=\"font-size: 16px;\">Standby.&#8221;<\/span><\/strong><\/em> &#8211; Laurie Anderson\u00a0<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-12857741\" src=\"https:\/\/www.philstockworld.com\/wp-content\/uploads\/2026\/02\/Nasdaq-Feb-11-2026.png\" alt=\"\" width=\"900\" height=\"673\" srcset=\"https:\/\/www.philstockworld.com\/wp-content\/uploads\/2026\/02\/Nasdaq-Feb-11-2026.png 900w, https:\/\/www.philstockworld.com\/wp-content\/uploads\/2026\/02\/Nasdaq-Feb-11-2026-300x224.png 300w, https:\/\/www.philstockworld.com\/wp-content\/uploads\/2026\/02\/Nasdaq-Feb-11-2026-768x574.png 768w, https:\/\/www.philstockworld.com\/wp-content\/uploads\/2026\/02\/Nasdaq-Feb-11-2026-150x112.png 150w, https:\/\/www.philstockworld.com\/wp-content\/uploads\/2026\/02\/Nasdaq-Feb-11-2026-696x520.png 696w, https:\/\/www.philstockworld.com\/wp-content\/uploads\/2026\/02\/Nasdaq-Feb-11-2026-265x198.png 265w\" sizes=\"auto, (max-width: 900px) 100vw, 900px\" \/><\/p>\n<p><strong>That&#8217;s a very ugly 2-hour chart! The 60-minute chart is just as ugly but the daily chart is not so bad BUT we hit 26,000 in October and that was the last hurrah for the great Nasdaq rally &#8211; so far &#8211; as the Shiller P\/E Index hit 40 <\/strong>(now 40.36)<strong>. And yes, we were valuing stock at 40 times earnings before &#8211; in early 2000, in fact &#8211; that ended well, didn&#8217;t it?\u00a0 <\/strong><\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.isabelnet.com\/wp-content\/uploads\/2021\/12\/U.S.-Cyclically-Adjusted-PE-Ratio.png\" alt=\"Valuation \u2013 S&amp;P 500 Shiller Cyclically-Adjusted P\/E Ratio vs.  Model-Predicted P\/E Ratio \u2013 ISABELNET\" \/><\/p>\n<p>When I say \u201c<em>Shiller P\/E hit 40<\/em>,\u201d I\u2019m not talking about the usual P\/E you see on CNBC. The Shiller P\/E (also called CAPE \u2013 Cyclically Adjusted P\/E) takes today\u2019s index price and divides it <strong>by the average of the last 10 years of earnings<\/strong>, adjusted for inflation (imagine how ridiculous it would be NOT to adjust for inflation?). In other words, instead of asking \u201c<em>how expensive is the market versus one noisy year of profits<\/em>,\u201d it asks \u201c<strong>H<em>ow expensive is it versus a full decade of REAL earnings power?<\/em><\/strong>\u201d<\/p>\n<p>That makes it a lot harder to game with one boom year. Regular P\/E will look \u201c<em>cheap<\/em>\u201d if margins are temporarily fat or if a single AI bubble year blows earnings out; CAPE smooths that by averaging ten years and inflation\u2011adjusting the past. Historically, that has made CAPE much better at flagging truly extreme overvaluations. The only times it\u2019s been around 40+ were 1929, the Dot\u2011Com peak in 1998\u20132000 (all\u2011time high 44) and the current everything\u2011bubble. Today we\u2019re back at 40.3 <span style=\"color: #ff0000;\"><strong>vs a long\u2011term average of about 17<\/strong><\/span>.<\/p>\n<p><span style=\"color: #ff0000;\"><strong>You simply CAN&#8217;T, economically, sustain this kind of price\u2011to\u2011earnings ratio because, above a certain point, the math of future returns stops working.\u00a0At a Shiller P\/E of 40, the market is implicitly saying:\u00a0<em>\u201cI\u2019m willing to pay 40 years of average, inflation\u2011adjusted earnings for this stream of cash flows.<\/em>\u201d<\/strong><\/span><\/p>\n<p>That translates into a real earnings yield of only 2.5% (1 \u00f7 40) before any growth assumptions. For that to make sense long\u2011term, one of two impossible things has to happen:<\/p>\n<ol>\n<li style=\"list-style-type: none;\">\n<ol>\n<li style=\"list-style-type: none;\">\n<ol>\n<li><strong>Earnings would have to grow far faster, for far longer, than they EVER have historically.<\/strong><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Over 150+ years, real S&amp;P earnings have grown around 1.5\u20132% per year; total real returns (including dividends) about 6\u20137%. Any higher than that and Inflation becomes an issue, which impacts margins and brings down earnings.\u00a0<\/li>\n<li>At 40\u00d7 CAPE, you\u2019re implicitly betting on permanently higher growth and margins than any prior era in human history in an Economy that is already running into hard constraints (energy, chips, water, demographics).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\"><strong>2. Investors must forever accept much lower returns than history.<\/strong><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>With a 2.5% real earnings yield, EVEN IF GROWTH IS FANTASTIC , your expected long\u2011run real return collapses toward 3\u20134%, <strong><a href=\"https:\/\/blogs.cfainstitute.org\/investor\/2024\/04\/17\/cape-is-high-should-you-care\/\" target=\"_blank\" rel=\"noopener\">not the 6\u20137% that pension funds, endowments, and boomers\u2019 retirement math are built on<\/a>!<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><img decoding=\"async\" src=\"https:\/\/i0.wp.com\/blogs.cfainstitute.org\/investor\/files\/2024\/04\/cape-is-high-why-should-you-care-scaled.jpg?resize=940%2C575&amp;ssl=1\" \/><\/p>\n<p><strong>Historically, whenever we\u2019ve pushed CAPE into the high\u201130s\/40s <\/strong>(1929, 1999\/2000, 2021, 2025\/6)<strong> &#8211; the system has resolved that tension the only way it can:<\/strong><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Either earnings mean\u2011revert down (recession, margin compression)<\/li>\n<li>Or prices mean\u2011revert down (a long, ugly bear\/sideways market)<\/li>\n<li>Or some combination of both \u2013 which drives very poor 10\u201315\u2011year forward returns\u00a0<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>So when I say you CAN&#8217;T \u201c<em>Economically sustain<\/em>\u201d 40\u00d7 CAPE, I mean:<\/strong><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>You can carry it for a while on cheap money, story stocks, and FOMO<\/li>\n<li>But you cannot compound 6\u20138% real for the next decade from here without either:\n<ul>\n<li>rewriting the laws of earnings growth, or<\/li>\n<li>accepting that someone (pensions, savers, future retirees) is going to eat much lower returns than the models are assuming.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>The past century of data says we won\u2019t get that miracle &#8211; we get mean reversion. And let\u2019s not forget: in the U.S., the bottom 60% of households hold almost no financial assets at all\u00a0\u2013 no real savings, no retirement cushion, essentially no buffer. So when we say\u00a0<em>someone<\/em>\u00a0is going to eat the losses when 40\u00d7 earnings comes back to earth, unless you\u2019re in the top 1% of the asset pyramid, that \u2018<em>someone<\/em>\u2019 is\u00a0YOU.<\/strong><\/p>\n<p>Labor data comes out shortly and Non-Farm Payrolls are likely to be weak (under 100,000) but let&#8217;s keep an eye on Hourly Earnings (0.3%) and the Average Workweek (34.2) as those indicators can alert us to shifting trends.\u00a0 \u00a0<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.briefing.com\/Common\/Images\/Content\/PageContent\/EcData\/earn.gif\" \/><\/p>\n<p>Meanwhile, THE ALIENS HAVE LANDED &#8211; or something because the FAA VERY SUDDENLY shut down the El Paso Airport for <strong>TEN <\/strong>(10)<strong> Days!!!<\/strong> They have CLOSED the Airspace and grounded ALL flights, locking down everyone in the region with, so far, NO explanation!\u00a0<\/p>\n<p><iframe loading=\"lazy\" title=\"YouTube video player\" src=\"\/\/www.youtube.com\/embed\/D4RCCd7hBFE?si=7UF6Wlgkm4AvpRLF\" width=\"800\" height=\"400\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>What else could it possibly be?\u00a0\u00a0<\/p>\n<p><strong>8:30 Update:<\/strong> Jobs were actually GOOD, with 130,000 jobs added in January vs 75,000 officially expected. As I said earlier, Hourly Earnings are important and they went UP to 0.4% from an anemic 0.1% in December and the Workweek went from 34.2 to 34.3 and 0.1 x 165M jobs is like adding another 165,000 jobs. <strong><span style=\"color: #339966;\">That is good news<\/span><\/strong> &#8211; especially with all those layoff announcements we&#8217;ve heard!\u00a0\u00a0<\/p>\n<p><strong>I guess we can live with 40x earnings for another few weeks and, if we keep getting numbers like these &#8211; maybe this time IS different. AI in the workplace is the biggest boon to Corporate America since the Industrial Revolution and yes, it will displace tens of Millions of workers (not yet) and it will drive millions of businesses out of existence (not yet) but, keep in mind, we are discussing whether the S&amp;P 500 can sustain it and the S&amp;P 500, BY DEFINITION, is an index of our 500 BIGGEST Corporations &#8211; NOT an index of the &#8220;<em>losers<\/em>&#8220;<\/strong> (who get dropped from the index).\u00a0\u00a0<\/p>\n<p>So, should we bet that 500 companies will grow and prosper and consolidate their base and drive out competition until it is just them and their 10 humans (each) and millions of robots extracting every dime out of &#8220;<em>users<\/em>&#8221; who are, effectively, under house arrest in Trump&#8217;s Amerika? ABSOLUTELY!!!\u00a0<\/p>\n<p><strong>You have a chance to bet on the Top 1% wiping out the rest of society and you already know the game is rigged &#8211; might as well make some money off it, right?\u00a0<\/strong>\u00a0<\/p>\n<p><iframe loading=\"lazy\" title=\"YouTube video player\" src=\"\/\/www.youtube.com\/embed\/YgSPaXgAdzE?si=eNZIHeMMK4TgVj8t\" width=\"800\" height=\"400\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;This is your Captain &#8211; we are going down. We are all going down, together. And I said: Uh oh! This is gonna be some day. Standby.&#8221; &#8211; Laurie Anderson\u00a0 That&#8217;s a very ugly 2-hour chart! The 60-minute chart is just as ugly but the daily chart is not so bad BUT we hit 26,000 [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":12857741,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[],"class_list":{"0":"post-12857740","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-available"},"_links":{"self":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12857740","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/comments?post=12857740"}],"version-history":[{"count":3,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12857740\/revisions"}],"predecessor-version":[{"id":12857744,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/posts\/12857740\/revisions\/12857744"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/media\/12857741"}],"wp:attachment":[{"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/media?parent=12857740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/categories?post=12857740"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.philstockworld.com\/wp-json\/wp\/v2\/tags?post=12857740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}