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Non-Tech : Tulipomania Blowoff Contest: Why and When will it end? -- Ignore unavailable to you. Want to Upgrade?

To: Mad2 who wrote (2166)	11/25/1999 4:18:00 PM
From: RockyBalboa	Read Replies (2) \| Respond to of 3543

How's that, from TFF: Analysts err most of the time, often too optimistic, even on Q earnings estimates. Are they totally wrong about a 5-year perspective? Message 12099733 Ebay trades at 2,171 times trailing earnings and RealNetworks at 1,214 times. Yahoo is comparatively cheap: You can get it for a mere 1,195 times trailing earnings. Investors buying these stocks are looking beyond current results, relying instead on exponentially higher earnings estimates five to ten years out. What are the chances that such long-range expectations will come true? This question is particularly important in a market where high valuations are more the rule than the exception. The answer is, poor. The director of research for the Dreman Foundation, Eric Lufkin, and I studied 108,000 analysts' quarterly consensus estimates of widely followed companies from the beginning of 1973 to the end of 1998. Normally, each consensus forecast was made up of from 10 to 40 individual analysts' estimates. The results were not encouraging. The consensus forecasts over the entire 25-year period were off from reported earnings by a startling 42% on average. (To be fair, analysts have gotten better lately at picking the right numbers: In 1998 they were off by only 36%.) Most of the analysts erred on the more optimistic side. The forecasting should not have strained the resolution on their crystal balls. We took the forecasts published two weeks before release of actual results.