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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Rational who wrote (10668)	12/9/1997 11:24:00 PM
From: Mike M2	Read Replies (3) \| Respond to of 18056

Sankar, I have a question about the savings rate data which is at historic lows is 401 k money included and if so is matching contribution also included? Thanks. With regards to relative PEs you make valid points but must point out that the quality and sustainability of the current reported earnings are dubious. In Barron's 11/10/97 p. 30 Martin Barnes of The Bank Credit Analyst points out that rate of growth of EBITD over the past several years has been less than half the rate of growth of reported earnings. See prior notes on this thread9605,7104. I will add more to this note later. Mike

To: Rational who wrote (10668)	12/10/1997 2:26:00 AM
From: Bearded One	Read Replies (1) \| Respond to of 18056

While I don't have your credentials, I would still like to point out a few items. 1) One problem with Bull/Bear fear/greed arguments is that the amount of information that the average investor uses these days is minimal. Quick-- anyone know Oracle's market capitalization offhand? I'll bet that most people who invest in Oracle don't know. They just look at the price-- "went down 30% in one day, gotta buy the dips". I think a better measure is the straight one-- supply vs. demand. It's a marketing issue, not a financial issue at this point. 2) As far as historical P/E's, I'd like to know about the standard deviations of P/E's. After all, if every stock has a 10/1 P/E one year, that's a very different market than if half the stocks have 5/1 and half the stocks have 15/1. With Microsoft at 50 P/E, I have a guess that the standard deviation is historically high right now. I also think that there are the companies that investors care about, and the companies where, for example, most of the shares are owned by the company itself. I simply think we have to eliminate the 'dead weight' in the P/E ratio. I could create, for example, a company called "Just Bonds", which just has a few billion dollars in 30 year US treasuries, put it on the stock market, and probably lower the P/E ratio. 3) Again with the P/E's, there just so much junk in them that why bother? What is the price/sales ratio these days compared to history? Isn't that at an all time high?