Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Oeconomicus who wrote (130144)	8/16/2001 9:50:01 AM
From: craig crawford	Read Replies (1) \| Respond to of 164684

>> Depression, eh? OK. Whatever. << just ask anyone who is long cien or brcd this morning! i bet they are in a depression! >> By your PE criteria, you would have missed everything since 1983 << i never said you had to sell once it crossed back above 10. but when you are in a bear market it's a good way to force yourself to buy when no one else is interested. my criteria would have gotten you in before the start of the bull market. >> Besides, one should not value emerging growth on PEs, except, perhaps, for stage 2 of a 2-stage growth model. << you keep talking about growth companies as if it's a given. you can't even fathom an environment where nothing (including the economy) grows. that's why i guess you're going to be a sucker like everyone else and get hurt as you keep buying. >> BTW, the S&P peaked in Dec '72 at 120 (up 4% p.a. plus dividends peak-to-peak from '66 in spite of a liquidity crisis and wage-price controls) before losing half it's value by late '74. << and like i said before, after accounting for inflation 4%/yr didn't make you shit. >> From the '74 low, it gained 13% or so p.a. over the next 6 1/2 years until the prime rate hit 21% at the end of '80 (not to mention $40 oil, $850 gold, the Hunt Brothers and the Iran Hostage Crisis). Inflation didn't hit double digits until the end of the period, so I think (real) money was made. << sorry my friend. inflation (the cpi) hit 11% in 1974. inflation was around 6% in 1970. inflation doubled throughout the seventies. the averages did not.

To: Oeconomicus who wrote (130144)	8/16/2001 7:40:12 PM
From: craig crawford	Read Replies (1) \| Respond to of 164684

>> BTW, the S&P peaked in Dec '72 at 120 (up 4% p.a. plus dividends peak-to-peak from '66 in spite of a liquidity crisis and wage-price controls) << the s&p 500 peaked at 94.06 on feb 9, 1966. it peaked again on jan 11, 1973 at 120.24. (closing prices). that is a return of 27.83%. the cpi during the same time was up 29% so you have a negative return of 1%. >> before losing half it's value by late '74. From the '74 low, it gained 13% or so p.a. over the next 6 1/2 years until the prime rate hit 21% at the end of '80 (not to mention $40 oil, $850 gold, the Hunt Brothers and the Iran Hostage Crisis). Inflation didn't hit double digits until the end of the period, so I think (real) money was made. << the s&p 500 bottomed on oct 3, 1974 at 62.28. it peaked on nov 28, 1980 at 140.52. a nominal return of 125.6% the cpi rose 54% during that time. so if you were smart enough to buy the exact bottom in 1974 and sell at the exact top in 1980 you could achieve 12% a year before dividends. by aug 12, 1982 the s&p 500 had slid back down to 102.42, giving you a nominal return of 64.5% over almost 8 years. the cpi was up about 67% during the same timeframe putting you back into negative territory before dividends. like i said, if you were some kind of great market timer buying at the bottom and selling at the top you could have made a little money. of course your time frame from late 1974 to 1980 means i can't use the years 1974 and 1981 in my inflation statistics. conveniently for you the cpi rose 11% in 1974 and 10.3% in 1981. if you weren't a perfect market timer and you bought at the start of 1974 you bought the s&p closer to 100 not 62, and you also would have to tack on another 11% for inflation. that would have surely put you in negative territory even selling at the top in 1980 and adding dividends. so like i said, trying to tell me that the 70's were a lucrative (at least gauged by the popular averages) time to make money in the stock market is hogwash and you are the one who needs to run along and bark up some other tree. i'm not finished with you yet! if you want to use the s&p as your benchmark, don't think i will let it slide that in 1980 energy stocks made up almost 1/3 of the weighting in the s&p. (how coincidental that technology topped out at about 34% of the s&p in 2000). i don't know right off hand how much percentage the mining companies made up but it wouldn't surprise me if more than half of the s&p 500 was made up of commodity related stocks. so much of these gains you claim that could be made in the 70's were commodity related. i suppose we could start a whole separate argument about small cap performance but that will have to be for another time. tell me again how i have no clue and i need to run off to some cave mr smarty pants!