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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: MikeM54321 who wrote (4604)	6/16/1998 9:23:00 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 9980

Mike, I think it is because the street is expecting the 3rd q at 7.5% and the Q4 at 15% YOY. But really, Abby's argument is that a 20 to 22 PE on the S&P is not particularly high if you view this in the framework of 5% long term interest rate. The way she sees it at a PE of 20 (just to simplify my calculus) you buy 5% return (earning returns not dividends) in companies that are growing (and sometimes very slowly, 6 to 12% per year, yet growing), while the alternative is 5% in Bonds that are not growing. I think that her rationale. However, if liquidity dries up, all rationales will be for naught. Zeev