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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 689.52-0.3%Jan 7 4:00 PM EST
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To: Haim R. Branisteanu who wrote (40223)2/13/2000 7:50:00 PM
From: Logain Ablar   of 99985
 
Hi Haim:

Thanks for the response. When one looks at historical PE's a factor often over looked is the tax rate. We've gone from a 20% capital gain rate (and 6 month holding period) when the top bracket was 70% to a 28% rate (with 12 month period) back to 20% rate (but AMT).

I would rather own a stock growing earnings and not paying dividends and take my gains through appreciation at the lower AFIT rate.

I know this assumes the stock price is appreciating but the GE's, MSFT's & CSCO's of the world do a better job with the investments vs. the AET's of the world.

So I think you can expect the market pendulum to swing to a higher PE in this type of environment before it reverts to the mean.

A lot of variables and I'm sure I'm missing plenty.

Have a good nite.

Tim

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