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To: Sonki who wrote (390)	3/11/2009 2:51:07 PM
From: Nancy	Respond to of 395

That is the whole point my friend said P/E is meaningless, a fiction that investors choose to justify prices paid. A meaningful measure should NOT fluctuate so much between good market and bad market - a meaningful measure should work in ALL market conditions, that you can rely upon to make a profit, and thus make a living, in the friend's case. One more thing to consider, a lot of the benefits from advancement of technology, cost reduction from productions, etc etc have been realized. It would be very hard to find the Next Big Thing... I am the amateur of the amateurs here, but I respect those who do this day in day out to craft out not only a living, but a fortune - in both bull and bear markets. As for me, I just have a humble goal - make every trade profitable - like berniyi just said on CNBC, take small profits all the time when the Market God is willing. It is very fortunate for us to go completely cash since 2nd time DJ hit 14K. 2008 was a travelling year for us with a total of 75 days out of home, and plenty of days pre / post trips having good excuses not to do anything market-wise. This really saved us from going back to market too early, such as last October, when we were on a cruiseship, on our way from Europe to U.S. ;-)

To: Sonki who wrote (390)	3/11/2009 7:38:48 PM
From: Nancy	Read Replies (1) \| Respond to of 395

Forgot to add, some stocks now have very heavy CASH positions, so that makes the P/E and PEG calculation even more unreliable - you have to take out the CASH portion if it is a sizable portion. Take CSCO, the price at 15 has 5 cash in it. So, do you use 10 to calculate the P/E or use 15? INTC has 2 bucks cash per share, it also has a 4.5% yield at 12xx - the dividend should be safe, unlike those from banks, industrials, and even drugs. Hence despite the seemingly aweful PEG, the stock has strong support at 12, so far. Both ALTR & BRCM has almost 4 cash per share, so how do you valuate it when stock trades between 16 and 18? NVDA & MRVL, both 8 buck stock, both have 2 buck cash... The list of tech stocks have 25 to 35% cash in share prices is going on and on... How do a P/E based on stock price can accurately reflect such scenario? Further more, the growth we see in the past, will not be repeated in foreseeable future - the productivity can only be improved so much... to a point, any further improvement is just something nice to have, but not a necessity. It will be a long time before we would see the return of "paying for the growth" approach.