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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: HB who wrote (34562)	10/26/1998 11:57:00 AM
From: Ilaine	Respond to of 132070

HB, didn't know there was a Krugman site. If you are still around, please post URL. Otherwise, I can surf. Not sure just how much of a lefty Krugman really is, anyone who takes potshots at Gephart can't be all bad. My query re: "nominal dollars or adjusted dollars" isn't just about inflation, I don't think, although maybe it is and I just don't realize it. I agree that within the context of the stock market, and within a given short time frame, a dollar of price divided by a dollar of earnings gives a ratio that can be compared with other stocks in the same country. A graphic example of the type of comparison I question is set forth as a chart on p. 3 of 10/27/98 Barron's, the comparison of, say, P/E ratios at market bottoms from 1932 to 1990, and today. One thing that bothers me is that present-day growth stocks, such as Microsoft, have quit paying dividends, and, supposedly, the increase in price is in lieu of that. Whatever you may think of this as an incentive for investors, this is in fact what such companies have been doing. So, how can you compare price-earnings multiples for the S&P as a whole from time period to time period? Also, sometimes price/earnings are calculated on last 4 quarters, sometimes on future 4 quarters, are they using the same methodology from time frame to time frame? I used to do original source research in history for a publishing house, I know how few actual historians do that, and I know that almost no journalists do, so I am principly questioning methodology, but maybe I am not using the proper terms. Regards, CobaltBlue