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 : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (110342)	1/7/2002 10:52:52 AM
From: kech	Read Replies (1) \| Respond to of 152472

I also read the old sage's post a week or so ago. As an Omahan my relatives force it on me at Holiday time. Wasn't his measure more like Stock Market Capitalization / GNP and not stock market cap growth / GNP growth? At the time I thought this measure was highly inversely related to interest rates and when you look at the data that is the driving force behind the highs and lows on the measure.

To: carranza2 who wrote (110342)	1/7/2002 11:06:32 AM
From: carranza2	Respond to of 152472

You're right, I had not read the article in a few weeks. Here's what he had to say: fortune.com On a macro basis, quantification doesn't have to be complicated at all. Below is a chart, starting almost 80 years ago and really quite fundamental in what it says. The chart shows the market value of all publicly traded securities as a percentage of the country's business--that is, as a percentage of GNP. The ratio has certain limitations in telling you what you need to know. Still, it is probably the best single measure of where valuations stand at any given moment. And as you can see, nearly two years ago the ratio rose to an unprecedented level. That should have been a very strong warning signal. For investors to gain wealth at a rate that exceeds the growth of U.S. business, the percentage relationship line on the chart must keep going up and up. If GNP is going to grow 5% a year and you want market values to go up 10%, then you need to have the line go straight off the top of the chart. That won't happen.