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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (67707)	4/18/2005 12:52:41 PM
From: Box-By-The-Riviera™	Read Replies (1) \| Respond to of 77400

but they are not profitable. and certainly not nearly to the degree at which they have been valued. but you're welcome to buy them if you feel otherwise. emphasis on the word: "feel"

To: Lizzie Tudor who wrote (67707)	4/18/2005 1:11:56 PM
From: GVTucker	Read Replies (1) \| Respond to of 77400

Lizzie, RE: If US companies are performing, in other words we have some of the best most profitable companies in the world, we should have a bull market. That is just common sense. Depends on the valuation. I don't have the March month-end numbers yet, but as of the end of February the US market (using the S&P 500 as a proxy) was in the 9th decile in terms of historical PE, the 10th decile in normalized real PE, the 10th decile in trailing dividend yield, and the 10th decile in price-to-book. The only places the equity market could be considered cheaper than average is the yield ratio between earnings yield and corporate bond yield (3rd decile) and the equity dividend yield differential compared with corporate bonds (3rd decile). In regards to a separate question of yours: yeah, well we had rampant inflation at the time so some of the increase in corp earnings was just inflationary, no? If an increase in corporate earnings is inflationary, then usually that same inflation will help stock prices, since everything is denominated in the same inflationary dollars. If the market hadn't exited the 60s with a high valuation then the 70s never would have been so bad.