Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: J.T. who wrote (3556)	8/1/1997 10:39:00 AM
From: kahunabear	of 94695

J.T. and Thread, Perhaps the tidal wave is cresting. I think that link yesterday, that shows price to book for the market, was pretty ominous. From an average around 1 to around 5. WOW! Companies have been able to milk a lot of earnings out of their assets in the last few years, but I think they will hit the wall soon. Then watch out below. You can cut expenses, reduce inventory turns, take restructuirng charges, and sell off assets to increase earnings. But do you pay up for these earnings as if they will increase at those rates in perpituity ????? The price to book and price to sales ratios these days are beyond ridiculous. Everybody looks at p/e (and BTW, they usually look at it on a projected basis these days) and that is not the real story. Many momentum stocks sell at 10 - 20 times sales and billion $ valuations. Their sales are often under a hundred million $. Its crazy. How long will the market pay 5 times what a companies assests are worth, when historically they have payed about what they are worth ?????? I refuse to be the greater fool. (No matter what it costs me) Britt

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