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Strategies & Market Trends : Technical Analysis - Beginners -- Ignore unavailable to you. Want to Upgrade?

To: Trader X who wrote (11558)	2/12/2001 4:04:55 PM
From: TechTrader42	Read Replies (3) \| Respond to of 12039

"It's all relative to the interest rate environment. In a falling rate environment stocks can command higher p/e's because they compete better with diminishing yields." Okey-doke (as Dr. Fell would say). That explains the P/E of 811 for the Nasdaq 100, based on earnings with generally accepted accounting principles (not pro-forma earnings). The ratio was 165 in March, btw. Now that rates are going down, I guess a P/E of 811 times combined earnings is reasonable enough. That's not pricey, now that I think about it. Maybe if interest rates were rising and the P/E were 8110 times earnings -- that might give me pause. But 811 -- that's just dandy. What if were 911? "Hello, we have an urgent situation here .... I'd like to report an over-priced market." "Relax. Interest rates are falling. Did you try breathing slowly into a brown paper bag?"