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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: Justa Werkenstiff who wrote (9845)11/13/1999 9:37:00 PM
From: mister topes  Read Replies (2) of 15132
 
The key here is this. The Nasdaq 100 based on the 20
largest companies with positive earnings both years
trades now at about 60 times next year's estimate.
The S&P 500 trades now at about 25.5 times next year's
estimate. Therefore the current Nasdaq valuations are
already built into the S&P earnings estimate. Obviously
there are some "tech dogs" in the S&P with sizeable
weightings that are holding down the multiple These
include fallen angels IBM and HWP and CPQ. You still
must respect Brinker's long ago comment that a P/E
ratio outside the twenties for the S & P 500 Index
seems unlikely. Obviously the upper twenties is
very possible as we were there in July at l4l8.78
on '99 estimate of $50.50.
Or maybe it's a New Era and the P/E goes to 60
for the S&P and the market doubles next year.
That would be Dow 22000 in Year 2000. Or maybe
this entire deal is getting out of control.
Or maybe the clueless will get sucked in at some
major top down the road and they will get slaughtered.
Sure is a long way from Dow 777 in 1982 though.
Notice how all of a sudden little old ladies are
discovering QQQ. They do not really care what it is,
they only care it seems to go straight up.
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