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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: AC Flyer who wrote (15104)	2/16/2002 11:16:37 PM
From: Wyätt Gwyön	Read Replies (4) \| Respond to of 74559

P/Es are high because: 1) earnings have been extraordinarily depressed by "kitchen sink" writeoffs those writeoffs aren't even included in the PEs. most of the PEs you hear about are just pro forma operating crap that excludes all the bad stuff going down on GAAP. whereas historical PEs prior to about a decade ago were always GAAP. the actual PE on the SPX is over 50. higher than in March 2000. that compares to a historical 14.5. even if you take a pro forma PE (the one everybody talks about), it is around 26 or so.

To: AC Flyer who wrote (15104)	2/18/2002 10:31:22 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 74559

Hi AC, I think a lot of positions could be argued ;o) For example, the markets might be back in the channel, only to find the cargo doors open, like what happened to the ferry a few years ago when I was living in England. Me, I am a simpler fellow. I think PEs are high because prices are outrageous and earnings aren't. Which we seem to agree implies that folks expect earnings to become outrageous. But it might be that folks also don't yet realize that they expect prices to become less high. Which certainly has been the case on the topic threads. At least, when one peels apart the logic of strongly held positions.