From zee at ix.netcom.com Wed Jan 5 07:55:00 2000
>You'd have to define "proper valuation" first. Go on: I dare you.
>How much *should* this market be valued at? And what makes your
>measure right?
Let's pick one high flying stock just to get our lines
reasoning clear and then see what we can say about the
whole market. How about Yahoo.com? Even though they've
lost 20% of their value over the last 2 days, they're still
at 410 right now. How much would they have to pay in
dividends to make your ownership of their stock profitable
over, say, a 40 year period?
Ha! You fell for it!
Yahoo doesn't pay dividends, so why on earth would it be "valid" to "value" it's stock based on a dividend stream? Similarly, since there's no dividends, what do you care about their earnings? They aren't sharing any of their earnings (or losses, for that matter) with you as a shareholder -- so why do you think this is the way to "value" a stock?
/jordan