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Politics : Formerly About Applied Materials
AMAT 301.88-1.0%Jan 14 3:59 PM EST
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To: Jacob Snyder who wrote (54071)10/11/2001 5:30:45 PM
From: Ian@SI  Read Replies (1) of 70976
 
Jacob,

re:find it hard to believe that we are now at the start of a multi-year bull market, with the S&P 500 at a trailing PE of 30. That's not where bear markets end, or where bull markets start.

1. S&P earnings have been artificially deflated by goodwill write downs. Thus P/E is probably not comparable with prior years unless the goodwill write downs get backed out.

2. S&P contains more high growth rate stocks in the tech and biotech areas than ever before. These tend to be short on earnings relative to price because of the perceived growth. They also tend to be more cyclical than the typical S&P company of prior decades. ... or at least their share prices are more cyclical. ;-(

And don't forget that courtesy of Bin Laden, oil prices are about $8/barrel cheaper than they were a month ago. With production at 25 million barrels / day, the oil consuming countries are paying about $200M less to OPEC each day. Thanks Osama. Maybe, you'll drive it down another $8 before OPEC takes out a contract on you.

That $200M daily cost reduction stimulates the global economy (at the expense of the OPEC nations) by almost 1% of US GDP annually. If I remember US oil consumption, about 25% of that is a direct benefit to the USA.

As most of OPEC production is from Arab nations; and Osama is not stupid, one has to wonder if the impact on his fellow Muslims was deliberate. It's far easier to recruit revolutionaries who are destitute than rolling in oil $.

Ian
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