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: Alomex who wrote (131190)	9/12/2001 1:58:01 PM
From: Oeconomicus	Respond to of 164684

The problem with Mark's chart, besides the fact that it's on an arithmetic scale and, therefore, potentially visually misleading, is that in an index such as the S&P, the index PE can rise or fall without any change in the level of the index or the actual earnings of the companies in it. As a market weighted index, should many companies with a negative "E" show up high in the market cap rankings, a drop in such companies while those with positive earnings rise could result in a flat index with a falling PE even with static earnings. I would also take issue, as I've done before here, with the notion that only PEs measured on GAAP earnings count. Forget the GAAP vs. proforma debate - that's not what I mean. Instead of either of those, one should look at "normalized" earnings, which essentially means the underlying earnings generating capacity of the business ignoring truly temporary disruptions to the long-term trend. In other words, don't just blindly accept a PE as low if the earnings are inflated by unsustainable, extraordinary gains and don't just blindly label a PE as too high if losses are due to truly non-recurring charges. Of course, you can then have a debate about what is truly extraordinary or non-recurring, but that's where this becomes an art, a judgement call, instead of hard science. Regards, Bob

To: Alomex who wrote (131190)	9/12/2001 2:48:59 PM
From: Mark Fowler	Read Replies (2) \| Respond to of 164684

I've done a lot of work on this back in July and August of this yr., if my projections are right we could see a symmetrical move down on the other side of the long term trend lines that put the S&P down to 400-480

To: Alomex who wrote (131190)	9/12/2001 7:40:17 PM
From: Victor Lazlo	Read Replies (2) \| Respond to of 164684

<<Having said that I believe the Dow would be fairly valued around 7500-8000 and down right cheap at around 5500-6000. >> I am amazed anyone could make such a guess when the near and intermediate future are unknown and ubstable. We are at war, if you hadn't guessed. Victor