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To: GVTucker who wrote (153455)	1/2/2002 11:42:17 AM
From: Harry Landsiedel	Respond to of 186894

GV Tucker. Re: "Shoot, if we go back to the valuation of the market of the late 70's and early 80's, things would go lower than bambs' predictions. Much lower." Wasn't the dollar a lot weaker and interest rates a lot higher back then? Didn't those factors partly lead to those lower valuations? HL

To: GVTucker who wrote (153455)	1/2/2002 11:55:15 AM
From: wanna_bmw	Read Replies (1) \| Respond to of 186894

GVTucker, Re: "all of those numbers reflect a valuation that is well within historical parameters." Show me where in history that the Nasdaq has taken an 80% drop, the Dow a 40% drop, and the S&P a 50% drop from their record numbers over a two year period. Valuations be damned, look at how frightened the market was last year when those stock indexes fell 70%, 30%, and 35%, and that was due to terrorists blowing up buildings on U.S. soil (not to mention destroying part of the "inpenitrable" Pentagon). Now you're trying to tell me that things could get worse, just because of historical valuations in the 70's and 80's, like those valuations could return out of the blue? And you think that the economy could survive that kind of a fall, should it occur? Well, no offense, since I really respect your posts, but I don't think there is any way at all that things could get that bad (barring some major catastrophe, natural disaster, or terrorist act). wbmw

To: GVTucker who wrote (153455)	1/2/2002 12:14:45 PM
From: Road Walker	Read Replies (1) \| Respond to of 186894

GV, In my humble opinion, you can look at high or low PE's from two different perspectives. It always seemed to me that it was more valuable to look at the trend in PE, how much the collective investment community is and was willing to pay for a dollar of earnings, and if that number was going up or down. For instance, the PE on the S&P 500 started declining well before the March 2000 peak in the markets (my memory is about 10 months). Even though earnings dollars were accelerating at a very significant rate, the market wasn't buying a dollar worth of earnings increase with an equivalent stock price increase. The PE on the S&P 500 continued to decline, and hit a low point at 22.xx in March of 2001, and has been increasing steadily since to it's current PE of about 40. Starting last March, folks began paying more for a dollar of earnings, even as the earnings have continued to decline. My belabored point is that if the collective wisdom of the markets is correct, earnings should start to increase in the near future. An increasing PE can mean that folks have more confidence in the future earnings of a company; or you can accept Bambs perspective that it means the collective markets are increasingly being duped into buying over-priced companies, unaware of their real value. Personally, I'll bet with the market, not Bambs. John