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

To: elmatador who wrote (24669)	10/28/2002 9:41:58 PM
From: maceng2	Read Replies (1) \| Respond to of 74559

One of the favourite charts of the bears on Wall Street is a historical graph of the price/earnings ratio of the stock market. I believe the S&P500 graph vs. P/E graph he refers to is this one. (scroll down to 2nd graph down. May take a little time to load) decisionpoint.com I'm not waiting for it to bounce on the red line. I think it will pass that, maybe the down momentum will stop on the green line. I'm not joking either. OK so we had a little bounce. I'm standing back, OK possible to resume upwards. The other scenario is the crashing continues. I'd say the fundamentals are the crashing continues before Feb to new lows.

To: elmatador who wrote (24669)	10/28/2002 9:51:53 PM
From: LLCF	Respond to of 74559

<The great technology bubble is purged> Well then pile into Cable, Wireless, Airline, and pipeline bonds... or are they still bubble? DAK

To: elmatador who wrote (24669)	10/28/2002 10:03:20 PM
From: TobagoJack	Respond to of 74559

Hi Elmat, Glassman is funny. <<First, p/e ratios always spike higher in recessions, since earnings are temporarily depressed.>> The problems are (a) earnings depression is not entirely temporary because a bubble popped, and over-capacity during bubble is worse than previous economic upturns, (b) consumer spending bubble, fueled by debt, is much worse than previous booms, (c) boomers are closer to their sunset years, but looking at emptied nests, (d) perpetual war and its funding will also dampen any upturn, plus, (e) potential monetary collapse (yes, we are as close to it as we ever did in our respective life times) will tie governmental hands in ways not tied before. <<Second, there is no reason why the current p/e ratio should equal the historical average, unless one believes that the economy and the financial markets are the same now as over the past 130 years>> This is simply a variation of 'this time its different' argument, which Glassman had already used once during the boom. Chugs, Jay