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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area -- Ignore unavailable to you. Want to Upgrade?

To: Crossy who wrote (3589)	7/15/2003 2:01:49 PM
From: michael john stout	Read Replies (1) \| Respond to of 37387

Hi Crossy. I agree there will be some earnings growth as companies cut costs. One thing you should keep in mind is that official GDP numbers are manipulated through the GDP deflator which makes ridiculous "quality adjustments". The thing is, the revenue growth is not there for this market to be priced where it is. The Nasdaq 100 is over 100 times trailing earnings and I believe about 75 times 2004 earnings with only 15 percent annual growth forecast for the next 5 years. And that 15 percent is HIGHLY suspect. Before I was laid off, I worked at an investment place where I had access to a bunch of "premium" databases. Since they are pay for use, I no longer have them, but as of several months ago, debt to GDP had hit a new all time high. I believe you can find consumer debt data at www.bankruptcydata.com. It's out of hand. Consumers need to be saving now, not going into more debt to keep the economy moving. At some point this will happen, and also the loss of high paying jobs to India is going to start to be a problem. I know there's always retraining, but for what positions? That will take time to play out. Basically, I think we're looking at 3-4 percent GDP growth but we're also looking at options expensing coming into play and other factors (elimination of pro forma perhaps) that will make people see that, because of years of excesses, this market is priced for 10 percent GDP growth for years. Nasdaq and S and P are insanely overvalued but there are lots of small caps that are undervalued. I don't always avoid penny stocks but I had a couple past experiences that were pretty irritating. The only way I will buy one is if I think it's worth 5-10 times the current price so there is margin for error. I have yet to find one of those so...