"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