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Strategies & Market Trends : Classic TA Workplace

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To: AllansAlias who wrote (48884)	8/3/2002 1:18:22 PM
From: MythMan	Read Replies (3) of 209892

>>The model can be used in more specific ways that can help in zeroing in on attractive stocks, too. Applied to most sectors of the market, the model suggests stocks are attractively valued. Technology is an exception. Tech stocks continue to comprise 14% of the S&P 500 and yet are expected to contribute only 5% of overall earnings in 2003, according to ISI Group. Remove tech and the market P/E based on expected 2003 profits stands below 14 -- well within the range of historical norms and arguably quite undervalued with interest rates so low. That situation, in turn, leaves a cushion under non-tech investors at these levels, in the event that earnings fail to live up to forecasts next year. That said, investors have to remember that an undervalued reading can be rectified in one of three ways: stock prices could rise, interest rates could climb, or expected earnings could collapse -- or any combination thereof.<< this is consistent with your recent postings about tech vs. non-tech.

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