Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: BGR who wrote (73619)	11/4/1999 11:01:00 AM
From: MythMan	Read Replies (1) \| Respond to of 86076

Are you the entire tool box?

To: BGR who wrote (73619)	11/4/1999 11:25:00 AM
From: Defrocked	Read Replies (1) \| Respond to of 86076

I thought you'd bite on this one, Grasshopper. The chart was not meant to be a forecast but instead to serve as an indication of relative risk and reward in today's market. Throw out '29 if you wish. Using only '87 as a "benign" example, five years later the index was only 18.5% higher for less than a 4% annualized rate of return under either arithmetic or geometric calculations. Is it any wonder many prefer to hold cash or bonds under today's circumstances? And I am very sure that at those market peaks most participants believed equities were fairly valued and bound to go higher. The trouble is the odds are so, so much against you in such an environment: New supply through IPOs and lock-out sales, B/Ds receiving warrants for next to nothing and then sold into the mania, inevitable stumbles in earnings growth because nothing grows at 35% a year forever(unless it's the BS out of Wall Street.) Indeed the market may continue on its merry way higher. Everyone could possibly get rich without risk or inflation. But when greed is rampant I watch my wallet. What you do with yours is entirely up to you of course. BTW, P/Es,Price-to-book,and Price-to-sales are indications of expected cashflows. The current price of the stock is in fact the market's relative estimate of cashflow discounted to the present on a fully diluted per share basis.