Buying opportunity

Carl Remick carlremick at hotmail.com
Tue Mar 13 16:07:44 PST 2001


One of Wall Street's revered traditions, the sucker rally, seems to be in progress today, so it's worth noting this comment in today's Wall Street Journal:

"Usually falling stock prices mean stocks are better bargains. But earnings are falling at an even faster clip than prices lately, so price-earnings have actually been going up. A week ago, the price-earnings multiple of the Nasdaq was 121 ... below the current 154 figure, meaning that investors are paying more for a dollar of earnings than just a week ago. Even if money-losing stocks are taken out of the Nasdaq calculation, the price earnings ratio is 35, a historically high level. In fact, a look at past bear markets underscores how expensive stocks remain. The Nasdaq traded at a price-earnings multiple of just 19 in late 1988, when the most recent Nasdaq bear market ended."

The magic of the marketplace!

Carl _________________________________________________________________ Get your FREE download of MSN Explorer at http://explorer.msn.com



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