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

To: Tommaso who wrote (48211)	2/22/1999 11:01:00 PM
From: BGR	Read Replies (1) \| Respond to of 132070

Tommaso, If there are publicly available, reproducible and accurate methods for estimating fair market valuations, then in an efficient market the market will never be (over/under)-valued. All investors will use these methods and any deviation of the market value from that predicted by these methods will at best be short-lived. IOW, the strong form of market efficiency will hold, when no one investor will have any edge over any other investor. Now, the strong form of market efficiency clearly doesn't hold. This means two things: 1. the market is quite often not fairly valued, but 2. there are no publicly available, reproducible and accurate methods to estimate the deviation. PE is such a measure. It is publicly available but neither accurate nor reproducible as holders of DELL LEAPS puts know very well. This is not to say that DELL is not overvalued - it may very well be - but to highlight the lack of any public domain metric which consistently predicts (over/under)-valuation. Gains and losses on pure speculation is nevertheless gains and losses. And the ultimate measure is the percentage gain/loss. -BGR.