Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: SouthFloridaGuy who wrote (1886)	2/13/2001 6:27:35 AM
From: Baldur Fjvlnisson	of 74559

Can you see QQQ at $15? """Think NASDAQ P/E is falling with stock prices? Guess again. As the red ink flows ó in a somewhat hidden manner ó the Nasdaq 100 is setting new standards for a price-earnings ratio by a major index. The index is now trading at 811 times the combined earnings of the companies in the index. The surge in the price-earnings ratio means stocks in the Nasdaq 100 are now exceptionally expensive on the basis of the companies' ability to actually make money. The ratio, which had never been above 165 before this year, reflects the fact that many Nasdaq companies are reporting huge losses for 2000, when their financial results are analyzed using generally accepted accounting principles, known as GAAP. That trend has been obscured, however, because many companies adjust the numbers in ways that make profits appear to be rising. "The disparity between the pro-forma headlines that companies emphasize in their news releases and the GAAP numbers has grown enormously over the past month and a half," said Thomas Coleman, the head of research and risk management for Aequilibrium Investments, a London-based money management firm...""" New York Times

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