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To: GVTucker who wrote (66132)	9/3/2004 9:23:33 AM
From: Dave	Read Replies (1) \| Respond to of 77400

I thought I might have "had" you. <ggg> I'll try to get up a lil earlier next time. However, it is interesting what you say. If the "peak" P/E of the S&P during the early 70s was 18 or so. What should that tell us now when the P/E is around 20..

To: GVTucker who wrote (66132)	9/3/2004 9:47:06 AM
From: Kirk ©	Respond to of 77400

RE: "Peak PE of the Nifty Fifty era was 1972, at 18.4. Peak PE of the early 60's was in 1961, at 22.4. Again, there's no question in my mind that the Bubble of the late 90's was unprecedented. " This chart I from Yardeni's material shows the bubble well home.netcom.com Yardeni has a variable asset allocation model that ranges from 30:70 Equities:Fixed when markets are "extremely overvalued" to 100:0 when extremely under valued. You have to pay now to get his actual allocations but I believe past past history would have him at 100% equities at current levels. Let me know if anyone has a chart of the Fed Model valuation going further back. One might now say that the monetary stimulus is also unprecidented as shown by this chart pw2.netcom.com I think the data says we should get unprecidented inflation of "hard assets" and for Americans this has been real estate (actual land) plus the materials to build homes (commodities like wood, copper, glass, etc.) The bubble now is probably in cost of materials to build a home that I hear have gone up considerably. This is a bubble because if the demand is real and constant, then more supply WILL come on the market to fill the demand and lower the prices. Lets say you buy a $400K home outside California. How much is land, how much is material and how much is profit? If you consider the material cost could drop 50% if demand in China and the rest of the World declines or is filled with increased supply, then this would show up in a decline in the home's replacement cost. Land and profit are subject to decline also if rates go up and people can't afford to buy... Perhaps you have 20% potential decline for materials and 20% for higher rates... this is quite a hit for folks outside California who are not used to this sort of volatility.