Kirk's Market Thoughts Message Board

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Non-Tech : Kirk's Market Thoughts

COHR 227.69

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10:33 AM EST

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From: Kirk ©	8/25/2006 12:13:03 PM
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Chart of the Day wrote yesterday: Today’s chart illustrates that the recent growth in earnings has led to a significantly lower PE ratio. In fact, the PE ratio is currently within the confines of a tight and very steep downtrend. So while the significant earnings growth of late is a plus, the market does not appear willing to pay more for each dollar of earnings. I think trends end when you see silly trend lines drawn like this AFTER a huge PE decline. My guess is it bounces off the 1980's peaks around 14 and tests the lower blue trend line from below (in the mid 20's) for a huge rally in the next year or three... Given that forward earings give a PE of 14... but guesses here are worth what you pay for!

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