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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: marc ultra who wrote (9790)	11/10/1999 10:15:00 PM
From: Kirk ©	Read Replies (1) \| Respond to of 15132

bulls/(bulls+bears)=55.29 up from 52.17 last week P/C ratio 10 day moving average-0.52 That p/c ratio of 0.52 is for today and I think the bull/bear data is taken Thursday or Friday. I've started to record the p/c ratio to see it is a better leading indicator than Bull/Bears which seems to be a trailing indicator. As such, it might make sense to record the 10DMA OEX P/C ratio for Friday's close which was 0.55?

To: marc ultra who wrote (9790)	11/10/1999 10:19:00 PM
From: Justa Werkenstiff	Read Replies (2) \| Respond to of 15132

Marc: We seem to be right back where we were in mid July. Bullish sentiment is on a huge upswing. Speculation in the IPO market abounds. Valuation, at least in the NASDAQ, is approaching the absurd. The S & P 500 is expensive. The overall market as measured by the S & P 500 is behaving relatively well but all it seems to need is the blessing of the Green Man or a good economic number before it takes off and generates a "wealth effect" holiday season. I believe the overall market has digested the three rate hikes and is ready to move higher. However, I also believe the economy has digested these rate hikes and is also ready to charge forward and to ratchet up the inflationary expectations. So, in effect, we are right back where we were in July except we have some better earnings to discount in the year 2000 which gives some upside in the S & P 500. But make no mistake about it, I think the overall market as measured by the S & P 500 is living on the edge here going forward. Brinker said this in 1997 in reference to Henry Dent's book: "So I think this may be a wonderful theory, but the question is whether it has any relevance at all when it comes to subjects like the business cycle, monetary policy, and valuation of stocks. It also does not seem to focus at all on the valuation of stocks. What about the fact that we are within 10% of the all time high valuation for stocks. If it is going to truly be a new era, we are going to have to see new highs in valuation. Up until now we have not been able to get more than 20x to 22x earnings for the S & P 500. If the new era theorists are correct, we are going to have to see 25x - 50x earnings. Then they will have a case to bring to the table. So until now, we have not set new levels for upside valuation. We have been here once before in the mid 1960s with the S & P 500 between 20x and 22x earnings with a low inflation scenario, I am not yet sure that the new era theorists have anything to crow about yet." And in 1998 Brinker said: "I would be very, very surprised to see the price earnings ratio get out of the 20s ever. I don't expect to see it. We are already at record highs (24x). I am not saying it can't go a little higher because in a market like this anything is possible." So, folks, how high can we go in the face of rising inflationary expectations and an all time low unemployment rate? At what point do we reach an inflection point?