Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: BigShoulders who wrote (4231)	4/2/1999 8:19:00 AM
From: MrGreenJeans	Read Replies (2) \| Respond to of 15132

Valuations I2 stated in a previous post that Bob mentioned on the show that S and P 500 earnings approximated $45+ in 1998 (I missed the show this weekend). Let's assume they came in at $45.50. So the S and P price earnings ratio on December 31st was higher than thought because earnings came in lower than thought producing an even more overvalued market then widely believed as measured by price earnings standards. S and P estimates for 1999 are projected at $51.50. That is a 13.19% increase in earnings from $45.50. Bob has stated that he thought earnings would increase in 1999 approximately 6% give or take a couple of percentage points based on projected 1998 earnings of $49 at least earlier this year. It seems to me that for Bob to be on target for 1999 S and P earnings estimates he has to believe profits will rise somewhere in the area of 13% or he has to revise his profitability number down. If he believes profits will rise the case for increasing stock valuations is on track. If he adjusts his profitability numbers down making the case for higher equity prices becomes more difficult. In any event, price earnings ratio on the 500 appear higher than thought. Any comments?