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Pastimes : James Cramer Skeptic Thread -- Ignore unavailable to you. Want to Upgrade?

To: Carmine Cammarosano who wrote (856)	10/20/1998 4:56:00 PM
From: Mama Bear	Read Replies (1) \| Respond to of 1254

"don't forget that a great time to invest is when stock prices are low(valuation)" Well, there's no arguing that. But where many who are relatively new to the market make their mistake is equating low valuation with relative price. For example, there were many who bought CIEN at 20 simply because it was down from 92 3/8. If an asset is overvalued by 100% at 100, does it become a good value because it falls to 75? BTW, corporate profits are contracting, and the big caps are sitting at some historically high valuations based on trailing earnings. By almost every metric. Barb

To: Carmine Cammarosano who wrote (856)	10/20/1998 6:21:00 PM
From: craig crawford	Respond to of 1254

>> inflation is low and when corporate profits are good. << Profits good? Keep dreaming...

To: Carmine Cammarosano who wrote (856)	10/20/1998 7:30:00 PM
From: EL KABONG!!!	Respond to of 1254

Carmine, Valuations are still way too high on selected large cap stocks, many of which have PEs over 50 and GPEs that are under a .5 rate. I cannot predict the specific direction of the market or any given stock, but historically speaking, either the earnings will rise to bring about higher growth rates & lower PEs, or the valuations of selected stocks will tumble to bring about lower PEs and higher GPEs. Since you've already conceded that the prospect of rising corporate profits may be a problem, which half of the equation do you think is more likely to come to pass? BTW, history tells us that there are no other choices... KJC