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To: sea_biscuit who wrote (23710)	3/12/2001 3:34:20 PM
From: SouthFloridaGuy	Respond to of 25814

Dipy, PE ratios mean everything; I know what you're saying though, the falling earnings environment inflates PE's, but believe me, PE does mean something! By the way, the P/S means absolutely nothing because it doesn't take into account profit margin. It's actually quite useless of an indicator because a lot of companies are bloating receivables to make revenues/profits look good. MSFT has a P/S of 13, does that mean it's a $5 stock, $10 to be generous? Also, what about market cap / GDP ? By that metric, the market is 50% overvalued from even the peak in 1929 and is currently at Japan 1990 levels...why, you ask? Because most market cap is weighted towards the overvalued NYSE!!! Implications? Dow has way more to fall. The best metrics are still: Cash Flow from Operations, Return on Assets, and Return on Equity. But given the intense B.S. in accounting used by these tech firms, I'll stick by good old technical analysis, gut, and history (Japan)...which means Nasdaq sub-1000, SPX 650.