SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Ask Michael Burke
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Richard Nehrboss who wrote (67064)9/1/1999 1:29:00 PM
From: Freedom Fighter  Read Replies (1) of 132070
 
Richard,

>>I take it you are referring to returning to the same PE level. The problem with this is that it's more appropriate to construct a model that makes assumptions about earnings growth and discount rates. I have no idea what growth
rates were in '29 or discount rates, perhaps similar, but I doubt it.<<

In the late 20s the growth rate of GDP and earnings was far in excess of those of the 90s if measured on the appropriate peak to peak basis. Furthermore inflation was lower and interest rates were significantly lower so it's easier to make the new era case in the 20s.

In the 90s, if earning growth is measured on a peak to peak basis it has been no faster than the long term historical average despite the fact that there were a significant number of tail winds related to depreciation charges and interest costs. And over that time the quality of those earnings has steadily declined.

So the 90's has actually been extremely disappointing despite the hoopla and general prosperity.

In addition, we practically had a global financial meltdown during the last 2 years due to the extreme credit levels. Even the Bank for International Settlements has publicly admitted that. So the idea that the economy is somehow less risky is the most ridiculous claim made by the bulls. It's out and out balderdash!

IMHO the facts are so clear that those on Wall St. that keep cheerleading stocks are either incompetent, delusional or will say anything to advance career and personal gain.

Wayne
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News