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Strategies & Market Trends : Market Gems-Trading Strong Earnings Growth and Momentum -- Ignore unavailable to you. Want to Upgrade?

To: puborectalis who wrote (5459)	2/27/2001 9:37:52 PM
From: Dave Gore	Read Replies (1) \| Respond to of 6445

Fallope et al, isn't it really obvious that the media and the expectations, fear and greed of the average investor are the real problem here. Especially those investors on places like Yahoo and RagingBull, but the professionals too. Hey, I love articles like the one you posted. I post them myself. But you know, what? When all is said and done... articles are a dime a dozen. Sometimes they are listened to, sometime they are ignored. Sometimes reassuring, sometime creating fear. For every article that says we are in a recession, there is one that says we aren't. For every one that says the Feds will cut intra-meeting, there are others that say no. We can't even decide whether it is a good thing for a cut now or whether it will cause people to say...."Wow, if they cut intra-meeting things must really be bad." Two of the top economists were arguing about that one Friday on a show I watched. It's crazy, really, with the ultimate, net reality of not helping anyone. Ya know? THE REAL CURE TO MARKET CONFUSION The absolute only thing that will help us figure out whether things are improving or not or whether stocks are reasonably priced would be a return to proper valuation measurments and standards applied fairly. To do that we need to make PE's and PEG's more important again. That way we don't have to depend on analysts as much...a very good thing! If a company announces earnings which lower their PEG or PE the stock goes up. If they miss, their stock will go down. It's all pretty easy and it used to be that way for decades. We didn't have whisper numbers from Analysts or CEO's setting up easy to beat comparison numbers so they could beat easily. None of that really mattered. By getting away from that regimen, the dot-bombs were able to make the lucky ones millionaires and billionaires as we got convinced that valuation didn't matter. Like I said before the media played right along and fed the fever. Now, most new investors don't even know what PEG is or how to calculate PE's or the difference between trailing and forward PE's. They still buy RIMM long as a momentum play with a PE near 1000, for goodness sake, when years ago you would confidently short anything over a PE of 50, even in tech. Hey, I'm all for adapting, but it would be a whole lot easier for all of us to make money if common standards applied. Instead stocks with relatively low PE's and growing rapidly sell off 20% because they miss their number by one cent, while other go up if they beat by a penny even if their PE is 300. Bizarro!