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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: pater tenebrarum who wrote (100376)5/7/2001 8:07:39 PM
From: KyrosL  Read Replies (2) of 436258
 
The NAZ p/e ratio in the second chart is misleading. There are a number of NAZ companies that reported huge losses, essentially writing off most of their multibillion dollar investment in the last few months - Globalstar and PSINet come to mind. Most of these companies will soon be delisted from NAZ. Including them in the p/e calculation produces a misleading p/e ratio. A better way to figure it is to use NAZ's highest capitalized companies, such as the NASDAQ 100. This produces a p/e in the thirties. It's still more than twice what it should be, IMO, but it gives a more realistic picture compared to the 200+ p/e shown in your chart.

Kyros
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