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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (51917)	5/24/2000 9:25:00 AM
From: westes	Read Replies (1) \| Respond to of 99985

Parallels are not the same as identities. If a real estate company normally has a P/E of 10, then during a mania it has a P/E of 40. If a networking company with a hot fast-growing technology normally has a P/E of 100, then during a mania it has a P/E of 400. You can't compare the chart with the P/E of 400 against the chart with the P/E of 40 and say "Oh my God, our crisis is 10 times worse than theirs." It's not a fair comparison, given the composition of the companies in the indexes. But our valuations are still bad.