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To: 100cfm who wrote (44612)	7/17/2001 10:54:43 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 54805

100cfm - hmm... I think stocks were at bubble valuations, precisely because they were fully priced for x% growth. I worked the analysis for several companies. Presented CSCO on the open threads and showed that it was being avidly priced as though it's current growth was guaranteed to continue to the point where revenue would go through the trillions within in the next few decades. By saying that 10% growth caused the bubble is tantamount to asserting that such growth would have been inevitable if AG hadn't done something. I think it's the other way around: that the prices were bubble prices and AG forced the inevitable "no the party won't go on forever" before everyone had their entire life's savings vacuumed into the pockets of those who run the money go round. John.

To: 100cfm who wrote (44612)	7/18/2001 5:11:04 AM
From: techreports	Respond to of 54805

Quality stocks such as discussed on this thread got ahead of themselves but were not at bubble prices until Greenie slammed on the brakes and killed all growth. So a company trading at 150-200 times earnings growing at 100% was fully priced or overvalued but it was by no means a bubble stock untill it's growth went to 10%. Then it's price became ridiculous and thus the bubble moniker. Most of the companies followed here were not at fault for the swan dive in their growth rates, in other words their stock prices didn't fall to the levels they are now because their prices were too high but because greenie took the economy from 5% to 0-1% No kidding..i asked the same question.. were stocks really in a bubble or over-valued? The economy was growing at an amazingly 5% growth. Why did Greenspan slow the economy? Inflation wasn't a problem? Did he fear inflation would become a problem, b/c of the low employment?? He raised rates while energy costs were going up..a double whamy on the economy.

To: 100cfm who wrote (44612)	7/18/2001 9:06:56 AM
From: hueyone	Read Replies (2) \| Respond to of 54805

So a company trading at 150-200 times earnings growing at 100% was fully priced or overvalued... One problem your analysis neglects to mention, is that earnings, or rather profits, growing at 100% was a mirage in most instances and was the result of misleading, engineered financial accounting. A close look at most technology stocks financial statements almost always revealed that these emperors had no clothes, or at least were partially naked long before Greenspan raised rates. In my opinion, eventually enough investors would have discerned this problem to bring these stocks down regardless of what Greenspan did. Having said that, I was guilty myself of not paying enough attention to this problem, so I suppose it is possible we could have merrily continued on in a delusional state a little longer than we did had Greenspan not forced the issue by raising interest rates, but eventually we would have had to pay the piper. Best, Huey

To: 100cfm who wrote (44612)	7/18/2001 11:51:58 AM
From: Pirah Naman	Respond to of 54805

Quality stocks such as discussed on this thread got ahead of themselves but were not at bubble prices until Greenie slammed on the brakes and killed all growth. Yes, they were at bubble prices, with unrealistic growth assumptions built in. Further, Greenspan did not kill the growth, however popular that sentiment seems to be among some. If you really believe he killed the growth, describe mechanistically how he did it. Be specific. Funny how everybody is quick to blame Greenspan for the fall, yet nobody wants to acknowledge how much of the bubble (rise) was due to fed actions, especially the money supply manipulations during that period. Instead of material asset inflation, we had financial asset inflation. - Pirah