John Pitera's Market Laboratory Message Board

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Strategies & Market Trends : John Pitera's Market Laboratory

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To: John Pitera who wrote (4652)	9/21/2001 9:09:59 AM
From: X Y Zebra	Read Replies (2) of 33421

The disparity between price and earnings can be corrected by (1) a price correction that brings prices in line with earnings, (2) earnings increases that bring earnings in line with prices, or (3) a combination of the two. History teaches us that bubbles normally result in price corrections, not value increases, because valuation bubbles far exceed reasonable, sustainable growth rates. Recent examples are the Nikkei since its 1989 top and the Nasdaq since its 2000 top. This would give us an indication of where er are headed to. The only thing left to figure out is the time frame. I believe this will have to do with the willingness of people that the emperor has no clothes. That could take some time, particularly because not many people want to acknowledge that they screwd up big time. What it is even more amazing is that the SEC condones this practice of the "proforma" rubbish. In view if that, one could make a case for the evil mother of all flea markets... the OTC:BB There, the companies are not required to file quarterly reports to the SEC... I suppose one does not have to worry if it is proforma or not, since... well, there is none. -gg- How can the SEC allow this ? It has always puzzled my mind. Worse, what is really troubling is the sanity of many that actually think they are "investing" in these things. Well... we will soon find out the true effects of the "pro-forma" reporting when many will seek retirement. I guess they could execute a pro-forma wish list of the things they would like to do in their retirement, let's see how real it becomes.

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