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 : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (3305)	11/6/2001 5:29:51 AM
From: Steve Lee	Respond to of 99280

The 3 stocks you mentioned may have had higher PEs in 2000, but they are insignificant in terms of index weighting. For a true reading of whether "the market" has a higher PE now than then, you need to look at the high weighting stocks, or run the numbers for the index as a whole. Unfortunately I didn't make the calculations a year or 18 mths ago, but I don't think much bubble-bursting has been done in terms of trailing PE (or estimated forward PE) on the major indices. EG, look at INTC's last 4 quarters of "earnings" along with next two estimates: 0.37 -> 0.15 -> 0.10 -> 0.10 -> 0.09 -> 0.11 Quite a decline but stock is only down 41% For CSCO: 0.18 -> 0.19 -> 0.03 -> 0.02 -> 0.04 -> 0.03 But stock is "only" down 68% which is less than the earnings decline. Of course these two companies have been reporting highly suspect pro forma earnings so the PE increase over the last 12 to 18 mths may have been more than it first appears.