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

To: yard_man who wrote (16091)	2/5/2003 2:38:59 PM
From: Lizzie Tudor	Read Replies (4) \| Respond to of 19219

Here it is believed that an earnings recovery is "around the corner" to the extent that some clowns will pay huge multiples for a biz that is not growing -- i.e. CSCO. Not to get into anything long winded here... but you do realize that Cisco's earnings were up 50%, no? That fits the definition of an "earnings recovery" doesn't it? Top line growth was nonexistant, but what is your real issue with indices, that P/E ratios are too high or that there is no growth. I'm getting a mixed message, at first it seems like P/E is your main concern... then you switch to growth. A few more companies up their E by 50% and its going to fix those ratios right up. There has been so much consolidation in the industry I can't see how that won't happen. Lizzie

To: yard_man who wrote (16091)	2/5/2003 2:56:03 PM
From: Terry Whitman	Respond to of 19219

OK- Now you're making some sense finally. <g> But, even if there are non-zero earnings at the bottom- they can still be quite small in comparison with ANY numerator(price). Since this is an exercise in comparison, I'd suggest that comparisons are very difficult to make on a fraction such as that. Maybe earnings are so small at the bottom that the P/E is still quite high IN COMPARISON to previous low points. Even at a price of 1, the P/E is going to be high IN COMPARISON, if the earnings are .03. As for discerning where earnings are going- That is way beyond my ability. The companies themselves cannot even do an accurate job of that- and their entire existence depends on it..