MELT-UP or MELT-DOWN: Cast your Vote Message Board

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Pastimes : MELT-UP or MELT-DOWN: Cast your Vote

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To: J.T. who started this subject	4/27/2002 4:20:22 AM
From: Steve Lee	Read Replies (1) of 361

Lower. All sorts of reasons for moves down but mainly because the market does tend to a sensible value over a long time period. We are coming down from peaks but market is still very overvalued and has a long way to go to get to sensible PE and PS levels. Analyst growth expectations are too high and still include pro forma. Growth rates for NDX stocks are typically around 25% but company guidance at what is sposed to be the bottom(and hence the period of highest growth going forward) is lower than analyst growth. An analysis of revisions to analyst earnings estimates shows that the one year out estimates are in general optimistic and get subtly reduced as earnings date approaches so as to make the analysts look more honest. I believe the current SEC and NY AG investigation of analysts will remove a big prop of deceit from the market, enabling a steep journey down to fair value. Once the Sep lows from last year are broken, they will represent a formidable barrier when the market tries to rise again.

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