Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Pancho Villa who wrote (6768)	4/11/1998 4:35:00 PM
From: Pancho Villa	Read Replies (2) \| Respond to of 18691

How about this for a well informed bullish opinion: #26 of 27: Mathew Moe Sat 11 Apr '98 (08:02 AM) The definition of 'bubble' in the market is focusing on growth rates. Is twenty percent compounded excessive, or is it 50%, maybe it starts at 100% or maybe doubling in three months? Whichever it is, we know it isn't happening now. What is happening now is just an adjustment to the reality of the new understanding everyone has about the truth of the market. As a recent WSJ article pointed out, the reasonable value should be 350% more than now and by the time we get there the basics will have advanced even further so we would still have a good safety margin. And, don't forget that just because a market is overvalued doesn't mean it can't go higher. Markets don't correct to some artificial `true' value, they forecast and predict what the value will be, so a high market means that things will get better, it does NOT mean that the market will retreat. For those who are "hung up" on PE ratios it should be obvious that the average PE should be 2 times higher than it is now, at minimum, and really good companies should be considerably above that level. PE's usefulness as an indicator is only good for comparative analysis. The real indicator is growth trend. If the growth trend of a company exceeds its competitive group then that company should have a higher PE on a comparative basis. The supremely successful investors invest on future earnings because they recognize the truth of the market being a predictor of the future, not a reflection of the past. As more people come to recognize this by greater education through the Internet and other services, the market will respond with even greater gains. No longer will the little investor be disadvantaged by the lack of knowledge that the wealthy have kept secret for so long. Everyone will recognize that stocks should be valued by growth trend and not PE. The Dow at 9000 is an incredible opportunity and will be viewed with longing and regret in the future. I guess the guy does not have a clue about how growth rates and PE's are related. Pancho