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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (28680)	10/7/1999 3:57:00 PM
From: Jacob Snyder	Read Replies (2) \| Respond to of 99985

re: "the main difference between now and the past periods you gave us as examples is that stocks have simply never been as highly valued as they are today." Yes. Investors have become habituated, over the last 2 years, to paying a PE 2 or 3 times the growth rate, at least for the Nifty 50. And this is a historical aberration. In 1962, the S&P 500 trailing PE peaked at 22. Then, it bottomed at 6 in 1974, and again in 1980. Over the very long run, the PE has been between 10 and 20, about 90% of the time. We only broke above the 1962 peak valuation last year. I bought more QQQ puts today, when it hit 127. So far, I haven't sold any, and they are all underwater. I think I may start taking profits with 5% pullbacks, rather than waiting for a 10% down move.