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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: sea_biscuit who wrote (71782)	11/28/2007 3:54:10 PM
From: Incitatus	Read Replies (2) \| Respond to of 116555

That's one reason I would prefer charts to valuation. Valuation is in the eye of the beholder, and it can only be determined in retrospect. Often a company will keep taking additional losses, then finally it bottoms and somebody says "why didn't you buy at P/E 10 and P/B 2?" The answer is "I bought at P/E 8 and P/B 1, but then earnings dropped by 75%, and they took charges and redid their books and P/B dropped by 80%. It's easy to know when to buy using after-the-fact numbers and valuations." The fallacy is that price fluctuates, but earnings, growth and book value are stable. In fact, they move more than the price.