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To: Square_Dealings who wrote (47755)	4/23/2000 3:11:00 AM
From: Mike Harkness	Read Replies (2) \| Respond to of 99985

Who says that the traditional Price to Earnings model is what should be used for all time? The world has changed but some refuse to believe it.M M, Thanks for the response. I really don't know how relevant PE's are in today's market. I just get nervous when people are saying "this time is different". IMO overvaluation can go on for years before stocks get back to historical norms. Mike

To: Square_Dealings who wrote (47755)	4/23/2000 4:03:00 AM
From: Bearded One	Read Replies (2) \| Respond to of 99985

But the P/E ratio historically had actual meaning when treating stocks as financial instruments, rather than, say, baseball cards or objects d'art. The P/E ratio could help you predict a future dividend stream which could then be compared to other places to put your money, like bonds. There was an ownership value to stocks as opposed to a future trading value. Dividends and P/E's which predict them place a floor on the intrinsic value to stocks, moderating downturns. Given that the dividend yields are historically consistent with a Nasdaq of about 1000, well, that's the support level for the Nasdaq as far as value is concerned. To say that there are more consumers than ever before is new-agey. There have always been more consumers than ever before.

To: Square_Dealings who wrote (47755)	4/23/2000 12:59:00 PM
From: Gary Sanders	Read Replies (1) \| Respond to of 99985

I'm not so sure that the arguments that "the world has changed" or that "this time is different" (not quote from your post) really are applicable to today's situation. True there is technology available now that never has been available before which is changing the face of the world. However, there are a number of other cases where there were bursts of technology which had just as great and greater impacts on the world. Examples of these are the railroads, automobiles, radios. television, etc... I think that these advances can be used as models into what is happening today. None of these are exact models of today's changes nor are they exact models of each other. However many of these did have similar impacts on economics and society in general. What happened in the 20's with the automobile companies, radio companies, and stock mania does seem to be to be analogous to what is happening today. History never repeats itself precisely in the same way, however I think there are enough historical analogous models to what is happening today to discount the "the world has changed" or that "this time is different" arguments. The world has changed and it has changed just as significantly in the past. Every time is different and every time has parallels. Looking at what happened in the past when many companies jumped into the fray of new technology, seems to offer quite a few parallels into what is happening today. You had an initial burst of new companies, overvalued stocks, industry consolidation, overvalued pricing of the consolidated companies, shakeouts of the remaining large companies, and severe corrections of stock prices. It may not happen exactly like that this time, but the odds are that there will be similarities to that. In fact, some of the noted events have already occurred. Unfortunately, in my opinion having a "correction" which brings industry leaders from a P/E of over 200 to 175 (i.e. CISCO), leaves plenty of more room for history to repeat itself.