MARKET INDEX TECHNICAL ANALYSIS - MITA Message Board

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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA

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To: lifeisgood who wrote (11350)	3/26/2002 12:52:46 PM
From: David Howe	Read Replies (2) of 19219

<< The S & P was not trading at a 49 PE in the early 90's. >> Actually, in the early 90's recession there were lots of companies whose earnings went to zero or worse and lots of companies trading at astronomical PE's. It was these companies that did the best when the economy recovered. A PE of 40 isn't high when that company's earnings have fallen 90%. When the earnings recover to a normal level that PE falls to around 4 or 5, unless the stock moves higher. This is just an example, but it's why your blanket statement is very likely false. << That's one of the major holes in the bull thesis that "we're going to the moon." >> We're not going to the moon or anything like that. It will be very choppy and is likely to return less than 6% per year on average over the next decade. IMO, Dave

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