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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Trebor who wrote (3896)	3/8/1998 12:56:00 AM
From: TREND1	Respond to of 42834

Bob When he talks about PE , he is stating a "fact" When he says dow 9,000 , he is predicting. I see no conflict. Larry Dudash

To: Trebor who wrote (3896)	3/8/1998 1:16:00 AM
From: wooden ships	Read Replies (1) \| Respond to of 42834

Bob: Interestingly, Brinker today made mention of the current historically high S&P price/earnings ratios in the context of a prior deep retrenchment which followed in at least one previ- ous time period when the market's valuations approached these lofty levels. In this vein, weekend's "Barron's" noted an astonishing fact. To wit, One nifty measure of how spirited a rise tech stocks enjoyed P.I. (pre-Intel) is that the market value of Microsoft has swelled by $40 billion since the beginning of 1998 --which is more than GDP will likely increase in the first quarter, assuming 3% growth. Put another way, Microsoft has added more in market cap in a bit over two months than the $7 trillion economy of the U.S. will add in the opening three months of the year. ---Barron's Magazine 9 March 1998 Hall of Fame quote of the week: He's weakened. He's powerless. He's a lame duck. He will accomplish nothing except making a fool of himself for the next three years....He has no credibility. ---Commander Bob Brinker, commenting on Bill Clinton, from the helm of the Starship MoneyTalk on 7 March 1998.

To: Trebor who wrote (3896)	3/8/1998 4:26:00 AM
From: sea_biscuit	Respond to of 42834

I don't see any contradiction between the two, even though when juxtaposed, the bullishness and the cautionary note make an interesting combination indeed. However, the former is a comment on how the overall investment community could behave in the near future, whereas the latter is advice to discerning investors like us! We do live in an interesting era. Dipy.

To: Trebor who wrote (3896)	3/8/1998 9:34:00 AM
From: Boca_PETE	Read Replies (1) \| Respond to of 42834

BobR: RE:<puzzles me is how he can be so doggedly bullish while also warning us that the S&P price/earnings ratio is almost at a dangerously high level.> While we are at a record P/E for the S&P on a trailing basis, the interest rate on the 30-year T-Bond recently hit a record low. Given Bob's predicted trading range for the 30-year T-Bond (5.5%-6.25%), seems to me he's expecting the economy to slow later this year. This slowing would cause lower interest rates and a possible FED reduction in short term rates to avert too much slowing in the economy. Therefore, his "doggedly bullish" position indicates to me that he believes the P/E will go higher into record territory as interest rates drop even lower later this year. Then there was that caller last week who asserted the theory that current times may justify a higher p/e than in the early 1960's because more companies have share buybacks, pay lower dividends and instead reinvest those earnings in the business. Also, the tech revolution is producing faster growth in productivity today. As a result of these differences, company growth rates are faster today and thus justify a higher p/e. I remember Brinker's curt response was "we'll see about that". Perhaps Brinker is starting to agree with some of these "New Age" concepts, but is warning that the higher we go, the greater the drop when things change for the worse. Good advice in my opinion. P