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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Pierre J. LeBel who wrote (26590)	9/5/1998 10:55:00 AM
From: bobby beara	Read Replies (2) \| Respond to of 94695

Hi Pierre, we are entering in a seasonal dangerous period, and I hear a lot of people calling a bottom. We are sitting on a Support line of an H&S pattern that points to 5500. A lot of people have unsuccessfully called each bottom since 7/31. decisionpoint.com Until we put together some rising bottoms out of the washout low (bullish divergence) on this indicator, which preceded both prior bull moves, we must conclude that the bottoming process may not be over. Here is some interesting reading: gmsresearch.com if you long, you wrong - until proven otherwise. bb

To: Pierre J. LeBel who wrote (26590)	9/5/1998 5:44:00 PM
From: HairBall	Read Replies (1) \| Respond to of 94695

Pierre: Shucks, maybe that is why all the scary crashes happen during the month of Halloween! <g> Regards, LG

To: Pierre J. LeBel who wrote (26590)	9/6/1998 12:06:00 AM
From: Moominoid	Respond to of 94695

That brings us back to the early 80's when the p/e ratio was consistently under 10!!! Interest rates were a lot higher then than they are likely to be now. 15 however is an entirely realistic looking P/E because earnings growth will slow down. The simple formula is: P/E = d/(rf+ep-g) where d is some conversion factor between earnings and whatever is actually being discounted (eg cash flow), rf is the risk free rate of return - ie treasury bills, ep is the equity premium (say 6%) and g is the long-run earnings growth rate. Of course this assumes earnings will grow at a constant rate whereas they will probably slow first and then increase again, but it is a simple heuristic tool.