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.

Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (4413)	8/22/2001 2:07:25 PM
From: Wayners	Read Replies (1) \| Respond to of 33421

I would suggest that when profits are depressed, that when the economy turns that profit growth will greatly exceed 4% until the norm is reached. P/E ratios in the 1930s were still quite high at the bottom, not because prices were so high but rather because earnings were so low below the mean. Profits were quickly depressed by 20% and at some point will quickly rebound to the mean and at that point slow back down to 4%, however prices will rise substantially when the inflection point is reached.