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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Return to Sender who wrote (4795)	8/8/2002 10:05:57 PM
From: Gottfried	Read Replies (1) \| Respond to of 95531

RtS, thanks for the Hickey post. Hickey says another 50% drop in the indices would not surprise him. Then he goes on to mention tech stocks he would buy. :) That doesn't show much conviction in the 50% drop theory. Gottfried

To: Return to Sender who wrote (4795)	8/8/2002 10:38:46 PM
From: Proud_Infidel	Read Replies (2) \| Respond to of 95531

+ The total stock market valuation as a percentage of GDP still hovers around 100%, versus the all-time high of 87% set in late August 1929 just before the Crash. Major market tops (1929, 1936, 1968, 1973 and 1987) all were forewarned when this indicator climbed to the 70% level or higher. Major market bottoms are normally seen in 20% to 40% range (27% in 1932, 20% in 1942, 37% in 1974 and 34% in 1982). Someone please correct me if I am wrong, but I believe the total stock market valuation as a percentage of GDP ratio well exceeded 100% in 2000, something like 120%. BK

To: Return to Sender who wrote (4795)	8/9/2002 12:18:39 AM
From: Cary Salsberg	Read Replies (1) \| Respond to of 95531

RE: "The total stock market valuation as a percentage of GDP still hovers around 100%..." A given GDP yields a given level of current corporate profits and a given level of future income streams. These are discounted to produce PEs and price levels. The discount is a function of current interest rates. It doesn't seem to make sense to compare stock market valuation to GDP without including the real interest rate. Also, the % of business (and GDP) represented by publicly traded companies is another important intermediate variable between GDP and stock market valuation. During severe economic contractions such as a "bubble" aftermath, the GDP remains flat or lower for a while. The market always looks beyond the valley, so it may gain on the GDP as a %. In conclusion, I need more data to put real value into a stock market valuation/GDP ratio.