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

To: sylvester80 who wrote (96684)	7/21/2002 1:52:47 PM
From: SOROS	Read Replies (2) \| Respond to of 99280

What does the fed model use in determining over or under valued status? Many like to simply use stock prices relative to where they were and how fast they got to where they are now. Is that not pretty childish? Little Johnny can put up a lemonade stand and mark it $5,000 a cup -- take a big black marker the next day, cross it out, and put $50 a cup. That's a 99% discount, but only a "new-economy" economist would see it as over sold or a bargain. By every traditional measure -- PE, P/S, Book, debt levels, etc. -- the markets are still very much OVER-valued. Sure there will be "over-sold" rallies based on the "new-economy" system. But if this bear plays out like others before it, we will get to millions of people swearing off stocks for good, and average PE's perhaps in the 7-15 range. Pull up a few stock "favorites." You can find some with reasonable PE's, but you can find tons with NO PE and crushing debt or ridiculously high PE's for ANY market environment -- much less a bear washing out time. I remain, SOROS