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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: Alex MG who wrote (16052)	2/4/2003 9:20:02 PM
From: Lizzie Tudor	Respond to of 19219

- Historical valuations - Historical trough valuations at end of bear markets. - Considering the historical magnitude of the bubble we experienced the inverse reaction (bear market) pendulum swing is likely not over. - Is there any evidence of a real turn-around in earnings? Enough evidence to support such lofty forward valuation multiples??... No, actually just the opposite, the recovery keeps getting pushed back, once again. You need to balance that against -Cash position (aka "enterprise value") of tech companies, this is skewing the average P/Es, net out the cash and you get a completely different earnings picture, I'm sure you know this -interest rate- fed model -consolidation in industries that generates pricing power Not saying I don't agree with what you are saying above, its just that things are not that simple. What you didn't mention was another thing that bears always bring up- stock option expensing which is also irrelevant, but past (emphasis on past) stock options "expenses" would have been huge hits to earnings and therefore they conveniently factor that in as if 1)stock options are a real expense and 2) past stock options gains are repeatable. BTW- on this "historical magnitude of bubble", one interesting thing is the year 1999 when naz went up 78%. An 80% rise in a year (most of the rise in the past 3 mos) and then of course a crash. I wonder if the brief spike really mattered... whether that money should count towards the "historical magnitude" argument. It was so brief and fleeting, not enough time to alter spending patterns or change the economic picture in any way. Just a thought.