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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Pirah Naman who wrote (48148)	10/20/2001 10:32:24 PM
From: Mike Buckley	Respond to of 54805

The long run earnings growth of the S&P 500 is ~5% pa. Thanks, Pirah. I didn't realize it's been that low. It makes sense when I extrapolate backwards from growth in the index, but I had never done that prior to seeing your explanation. --Mike Buckley

To: Pirah Naman who wrote (48148)	10/21/2001 4:06:42 PM
From: Seeker of Truth	Respond to of 54805

That seer(moron might be better) with his citing the P/E of today compared with the PE of 1929 has it wrong. The P/E of today is after 12 months of poor business conditions. Naturally the earnings are way down. There's no way that for example Motorola's price can meet its negative earnings. There are lots of big losses around. What's the P/E of a stock that has earnings of 2 cents a share and the usual earnings are around $1 and it's price is now ten dollars a share? It's 500, natch. Such numbers go into the average P/E. By contrast in 1929 before the crash, earnings were good. Good as they were, they were not reported as honestly as we do now. The SEC did not yet exist. So just from that point of view there has to be a somewhat higher P/E today. That said, I'm just as bearish as that pundit but for geopolitical reasons. His P/E comparison is simply ignorant.