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.

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

To: Arik T.G. who wrote (39968)	5/14/1999 9:11:00 PM
From: Casaubon	Respond to of 94695

what are the conditions where you buy a market that has a P/E of 100 when a company has earnings of $0.01 this year and will have earnings of $1.00 next year

To: Arik T.G. who wrote (39968)	5/15/1999 11:32:00 AM
From: Bull RidaH	Read Replies (1) \| Respond to of 94695

Arik, True... A depression would allow that scenario... Where earnings for the S&P 500 fell to say... $5.00... for a short period of time, and the index found its self back to around 500... would be a buy if the long term outlook was still bright. For the optimistic view, If the long bond were to fall to say... 3.3%, and the profit growth outlook was 25%+ for the next 3 to 5 years (Which would be the case if Republicans ever won control of our government), a market P/E of 100 could be justified and maybe even a good buy for a brief period of time at the beginning of that 3 to 5 year stint. But you already answered the real instances I was referring to... YHOO and AOL and other high P/E super winners. Here's the point I'm making: to state that any arbitrarily designated P/E level is a buy or a sell without considering underlying fundamentals is not valid in the real world. Regards, BK