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 : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: fedhead who wrote (1193)	1/4/2000 6:40:00 PM
From: re3	Read Replies (1) \| Respond to of 42523

HE doesn't sense despair...didn't the nas drop 20 % interday then ? effing hell, 20 % would poot the nas at 3200, then divide by 10, add cinnamon and presto, you've got fair value... boards.fool.com

To: fedhead who wrote (1193)	1/4/2000 6:57:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 42523

well, no, i don't really think it will go there. as you say, that would require a rather nasty depression. however, it is not inconceivable for secular bear markets to shave 90% off the preceding bull market highs...it has happened in the past and there's no guarantee it won't happen again. just think about it: the NAZ p/e is now about 200. it's LT average is closer to 20. the extreme p/e expansion is purely a phenomenon of the 90's, fairly recent and in terms of the big picture a statistically aberrant period. so a 90% drubbing would get us to this 20 p/e, which is pretty high anyway (discounting 20 years of earnings on risky stuff like tech stocks? come on! - see what i mean?). now assuming that earnings actually decline during a recession (a reasonable enough assumption) reaching a 20 p/e may require what would look like a pretty sharp decline from today's levels. admittedly this NAZ 300 stuff is completely arbitrary and more or less in jest. still, 300 is a level last seen 10 years ago. in non-inflation adjusted terms a bottom could be higher and still be the equivalent of that level. note that the Nikkei hasn't even managed to surpass it's mania high of 1912 in inflation-adjusted terms, not even at the height of the mania ending in '89.