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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 683.89

+0.3%

Dec 3 4:00 PM EST

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To: Les H who wrote (72174)	3/14/2001 5:10:22 PM
From: Wayners	Read Replies (3) of 99985

That article is useless because while it has the big headline NASDAQ at 100 P/E to catch eyes, it never says how the number is calculated. Do they take all the earnings for all companies whether positive or negative and add them together to get the E? Do they only include the companies with positive E's? Do they count the ones with negative earnings as zero and those with positive as what they are? You can make the P/E on an index look like almost anything you want. If all companies with zero, non negative earnings have P/E's that explode with out limit are thus so overvalued, how come stocks don't all trade at zero until they actually have earnings? Do you think they added up all the book values of all the companies and subtracted those out of the P values? Do you think they considered the PEG or PSG of the Nasdaq? Do you think they could have run a Price to Sales number for the whole Nasdaq for comparison? Or how about Discounted Cash flow? Do stocks with negative P/E's trade below zero?

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