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Technology Stocks : Winstar Comm. (WCII)
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To: dougjn who wrote (8640)10/12/1998 7:31:00 AM
From: limtex  Read Replies (1) of 12468
 
Dear Dougjn -

Your reasoned arguments are very strong but just imagine what would happen if you put the P/E excercise on a spread sheet and THEN factored in a recession?!!!!

Actually I just cannot bring myself to believe that the S&P could drop another 25% or in fact drop below 900. Ask me why? I just can't give you a reasoned argument. It just doesn't feel like it now.

Maybe it has to do with that there are more investors out there and that there would need to be a lot more stock to be sold by people but thepeople won't do that because they will just hang on even for years in the knowledge that after a time the stock will recover. I think that is the main difference between now and 1929 a lot more people have an interest to stay clam and not sell because their retirements are tied to the market.

Put another way maybe the individual retirement investor is a lot tougher and more calm and stable than the leveraged funds and the institutions!!!

The other big thing is confidence. A week of solid gains by wolrd markets could change everything by reinstalling confidence. So much do we all want to say 'OK its over no more down and we'll start building back form here'; and then the sun will come out again and we will realize that we weren't in a 1929 situation.

Now this is unscientific emotion but maybe thats what got us up to 9,300 and droppped us from it so maybe it'll clam it all down as well.

The unmeasurable human emotion of confidence is a very big influence on P/E's!!!

Regards,

L
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