John Pitera's Market Laboratory Message Board

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Strategies & Market Trends : John Pitera's Market Laboratory

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To: John Pitera who wrote (4465)	8/27/2001 8:26:14 PM
From: MulhollandDrive	of 33421

I've been pondering the question of the sell off in price or longer sideways correction (since it's inception<g>) for some time. From your article..... Merrill Lynch's Mr. Farrell also wields a great deal of influence among small investors, as well as professionals. His view is more temperate.''I've been saying for a long time that it could go to 700 or to the low 700's,'' he said. ''When people start saying, 'Why stop at 700? Why not 600, or 500? - when the risk seems open-ended - that's when the bottom will occur.'' I remember well seeing analysts shrug their shoulders at high mulitiples and price valuation "parameters". When is the last time you heard the term "EBITDA" used as justification for price? When you point out the PE levels and Book Value levels of 1974 and 1982 as "interesting reading". As in "sobering" reading? <g> I guess I have to wonder if instead of "choking" on average or low multilples, they can head to even LOWER valuation levels. Maybe valuations can equally become just as irrational "exuberant" on the bearish side.

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