From: John K Clark (jonkc@att.net)
Date: Thu Aug 08 2002 - 22:29:44 MDT
"Samantha Atkins" <samantha@objectent.com> Wrote:
> If we are headed for a Great Depression type scenario, which
> would not surprise me, [...] I am more of the DOW 5000 or so
> school with many secondary nasty economic consequences.
Forget 5000 if we have a 1929 type depression you can expect the DOW at 500
or maybe even 50, but I don't see that happening. Compared to then the
banking system is in good shape, most people have a job and most important
of all productivity is increasing strongly.
Reason wrote:
> My 2c: historically speaking, the markets are way high. Companies average
> P/E ratios of twice the historical average during boom-bust midpoints.
That's true but not necessarily an ominous sign. In the last century the 3
times when the P/E ratio were the highest was 1920, 1932, and 1981.
Those were also the 3 best times to invest money in stocks, they were at the
start of huge bull markets. Stocks were very cheap but because of tough
times profits dropped even more than the price of stocks thus high P/E
ratios; but tough times don't last forever.
John K Clark jonkc@att.net
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