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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: Justa Werkenstiff who wrote (9835)11/13/1999 12:59:00 PM
From: mister topes  Read Replies (1) of 15132
 
Actually Justa, Brinker did not say in Barrons
"just under 25 times" period. He went on to say
in the very next sentence in Barrons "This allows
for modest multiple expansion in the event interest
rates move lower and slower economic growth materializes."

This clearly states that slower economic growth next
year coupled with lower rates opens the door for the
P/E to return to the area of the summer 1999 highpoint
of 28 times. This would be modestly higher than 25.
Seems like the language is appropriate, well chosen
and clear as a bell. As you have noted, Brinker is
not easily persuaded P/E ratios on the S&P 500 Index
will rise dramatically higher than the twenties,
but he has acknowledged the 28 times multiple (1418.78)
of July 1999 based on estimated operating earnings for
the current year. Now, of course, in November, these
numbers can begin to apply to Year 2000 earnings, which
investors are clearly in the process of doing now.
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