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To: Defrocked who wrote (73605)	11/4/1999 10:29:00 AM
From: MythMan	Respond to of 86076

stop posting that crap -g-

To: Defrocked who wrote (73605)	11/4/1999 10:55:00 AM
From: BGR	Read Replies (2) \| Respond to of 86076

The analysis here is flawed for several reasons. 1. It tries to forecast future performance, but ignores future cash flow estimates altogether. A firm's value, of course, depends on its future discounted cash flow. By that measure, DJIA may or may not be overvalued, but any analysis is incomplete w/o that measure. 2. It then presupposes that Oct '99 will be a major stock market top based on the incomplete analysis. (Even if the analysis was complete, it is hard to forecast market tops as similar arguments have been true for about the last 2 years or so, and the market has continued to go up.) 3. It then does an arithmetic average of future returns for previous market tops to estimate future returns from '99 going forward. Arithmetic averages are most skewed by extreme values than other averages and no wonder that the '29 figures contribute heavily in this regard. W/o '29, the 1 year figure would be a -17.7% return. Now given that the DJIA dipped some 11% from its peak in the last few months and then recovered, I think only traders are going to get excited over the slightly larger forecasted one year dip. In summary, investing on the basis of such simplistic spreadsheets is something I would personally strongly recommend against. This is no different that chart overlaying, which seldom works. But the human propensity to mine data nevertheless continues to be a driving force. -BGR. PS: I think it is quite clear that '29 was a special case.