There are many institutional S&P 500 forecasts in the media for 2009, generally ranging from 850 to 1100 with some outliers on each side, but seldom is the underlying detail provided. One of the more common methods of estimation involves normalization of earnings times a reasonable multiple based on history.

This article will attempt to back into some of the leading institutional projections using normalized earnings and historically experienced multiples.

Key Historical Index Price Levels:

The S&P stands now at 924. It had a low of 741 last November and 666 in March. The high in 2007 was approximately 1575. The low in 2002-2003 was approximately 770.

Institutional Estimates:

We cataloged a number of institutional forecasts in a recent article. The forecasts here come from that article plus a few newer ones. Estimate publication dates range from early May through now (issued within approximately a month).

Goldman this week

Some traders think this might be a good day to spend on the sidelines.  Not Scott Black.  He says investors should get to work right away, snapping up value stocks.”Most of the systemic risk has been taken care of by the Federal Reserve…but I would stick to what you do normally, which is to buy high-return-on-equity stocks,” the president of Delphi Management told CNBC.  “At this point, I don’t think the underpinnings of the market are such that we’re going to see major downdraft from here.

Although he believes it’s safe to go into the water again, he sees some rip currents to beware: “[Investors] probably shouldn’t be buying financial-service stocks,” he said.

Recommendations:

So what looks good to him?

Track his picks at:

http://trackthepros.com/stocks/category/1006

“You can go to things like oil-service companies, that have good contracts into next year,” he said.  “You can buy companies like Noble