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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 685.66

+0.2%

Dec 5 4:00 PM EST

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To: Bruce Brown who wrote (71382)	3/6/2001 1:03:37 PM
From: jmootx	Read Replies (2) of 99985

Bruce A great example of that was in 1992 I bought IBM during its crash--its dividend was a standard when the stock was at 100-120 in the late 80's, paying a steady 4%. Also people forget the Big Blue model "We will never lay off any of our employees, blue suits, etc.." Then when it crashed to the 40's where I bought (eventually crashed to 34, missed the climax) they maintained an outrageous 8% dividend for almost three quarters !! That marked the end..they then went on to cut that premium down to about 2-3%, began to lay everyone off, and the stock took off. So we really are in a new era for where the evaluation game will play off--again my estimation is PEG ratios is the new standard for S&P stocks and will replace PE's-- I am estimating they should be about 12-18, with most OEX companies getting a premium at the high range.

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