Now We Really Bottomed !!!!!

Originally posted by mattjclark
I know I've said this before, but what the hay.



It's easy to pick the bottom. Every major downturn has bottomed when the P/E ratios reach historic levels (i.e. below 20).

FYI: We're not there yet.
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what's an easy way to find out where we are? i know how to find p/e ratios, but is there a web site that says what the average is?
 
FWIW, most analysts think the EPS of the S&P will be between $55-58. If you take out tech the number goes much higher so it can be argued that the S&P, without tech, is undervalued. But as we saw in 1999, fundamentals don't matter.
 
Originally posted by Gordon Gekko

what's an easy way to find out where we are? i know how to find p/e ratios, but is there a web site that says what the average is?
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Hey GG,

I don't know a good way to tell you what the average current P/E ratio is for all stocks, but I do remember hearing in something that I recently read that the Naz 100 was selling at about 57 times earnings (not the gospel, just what I recall)

The entire market is probably selling at about 30-40 times earnings (that's a total guess).

I'm not sure if Yahoo info is proforma earnings actual earnings

I'll mail you if I get better info.
 
Originally posted by Vishnu
FWIW, most analysts think the EPS of the S&P will be between $55-58. If you take out tech the number goes much higher so it can be argued that the S&P, without tech, is undervalued. But as we saw in 1999, fundamentals don't matter.
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You're are correct Vishnu, that the Naz throws the P/E ratios way out of whack, but I think if you do any research the truth will bear out that P/E ratios have to drop before the market returns. If the past history holds, then the Dow is probably getting closer to fair value, but the Naz has a way to fall (or earnings must increase).


FYI:

1999 is certainly not the first time we've had wild speculation where P/E's were commonly in the hundreds.

Look at the P/E's in 1929, 1962, and 1968 (also in 83 and 87 but not as pronounced). In all these cases the markets had to settle back to historic levels before the market turned.
 
The market has too many outside influences right now to even consider simple P/E's and other fundementals. Yesterday Enron, today Wcom, tomorrow...who the heck knows?

More than ever we must Respond to the market....note that I said "respond" rather than "react"....take in all the data (quickly) and respond to all the data....it sounds simple and easy, but so many end up with "knee jerk reactions" to the news, and get whipsawed quite a bit.

Good Luck everyone!! 200 point down opening it appears....

Don
 
Originally posted by Don Bright
The market has too many outside influences right now to even consider simple P/E's and other fundementals. Yesterday Enron, today Wcom, tomorrow...who the heck knows?
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I think you missed the point.
 
Originally posted by mattjclark


I think you missed the point.
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Perhaps, but I do understand your references to historical numbers, and agree with you completely about the fundementals....I was just pointing out the "newsie - ness" of the current markets.

We have "returned to normal" somewhat in the overall markets...back to the days you mentioned above...

Don
 
Originally posted by Don Bright


Perhaps, but I do understand your references to historical numbers, and agree with you completely about the fundementals....I was just pointing out the "newsie - ness" of the current markets.

Don
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see that's funny, because I don't think this is news (although clearly the market thinks it is news).

I'm pissed because a biotech that I held overnight is down 7%, on a piece of news that we knew three months ago.
 
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