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 : Guidance and Visibility -- Ignore unavailable to you. Want to Upgrade?

To: Teri Garner who wrote (17874)	9/23/2001 9:21:26 PM
From: ChrisJP	Respond to of 208838

Hi Teri, The S&P 500 is trading at 18.6 times projected operating earnings, compared with a long-term average of 15 times By historical measures, S&P 500 stock are maybe 20% overvalued at worst. That is based on projected earnings of $45 (pre-attack consensus was over $50 I believe). But .... 3% interest rates need to be factored in. In 1981 -- stocks were extremely out of favor. The PE of the S&P 500 in 1981 was something like 6 !! Back then nobody wanted to own stocks because it made more sense to be in debt because interest rates were lower than the inflation rate. Also -- people still remembered losing 40% of their portfolios in the 1973 - 1974 recession. I'm guessing that stocks are currently more or less properly valued. There's only one problem -- nobody wants to own them right now !! Including me, lol. Regards, Chris