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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: DD™ who wrote (3517)2/27/1999 1:25:00 PM
From: Investor2  Read Replies (2) of 15132
 
Re: "The DJIA would have to fall all the way to 4000 before the first of the three major valuation ratios (Price/Earnings, Price/Book Value, or Price/Dividend) returned to its 70-year average. Meanwhile, the message from OTC growth stocks is no less ominous. Final December figures from the Nasdaq came within a fraction of our projected yearend P/E of 93.5. We estimate that as of February 1, the P/E has moved up near 105."

I agree that an average P/E of 100 should be viewed with concern. What was the P/E of the Japanese market in 1989? I think I remember that it was less than 100. Ten years later, those that bought the Japanese market at the top still have a 65% loss.

The popular belief in the US market is that making money in stocks is a certainty, as long as one is "in for the long term." How long is "long term," when one can have a 65% loss after 10 years?

Best wishes,

I2
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