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Technology Stocks : Google Facts Zone
GOOG 281.820.0%Oct 31 9:30 AM EST

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To: Lizzie Tudor who wrote (2398)11/9/2007 2:28:09 PM
From: Lazarus_Long  Read Replies (1) of 3618
 
Are these buying opportunities?
stockcharts.com
stockcharts.com

This article examines the historical relationship between price-earnings ratios and subsequent stock market performance and discusses why history might not repeat itself this time. The article finds strong historical evidence that high priceearnings ratios have been followed by disappointing stock market performance in the short and long term. Specifically, high price-earnings ratios have been followed by slow long-run growth in stock prices. Moreover, when high price-earnings ratios have reduced the earnings yield on stocks relative to returns on other investments, short-run stock market performance has suffered as well.
findarticles.com
Hey, don't argue with me, argue with the Fed.

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Despite this evidence, however, we cannot rule out the possibility that these historical relationships are of little relevance today due to fundamental changes in the economy.
It has een pointed out that the internet revolution may be less revolutionary than we think- -that radio and TV were actually more so (Schiller, "Irrational Exuberance", 2005 edition). The radio revolution was part of the 1929 bubble. The TV revolution was part of the lates '60s and early '70s bubbles.
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