libertarian article on financial panic and collapsegreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread |
article
-- Ct Vronsky (vronsky@anna.com), June 03, 1999
GREAT article! Thanks for sharing it.
-- King of Spain (madrid@aol.com), June 03, 1999.
Great!
-- curtis schalek (schale1@ibm.net), June 03, 1999.
Here are the compelling numbers as I see them. The market p/e ratio of 34 is twice the historical norm (14.7). Throughout any 15 year period in history, the highest earnings growth recorded is 8.7% (call it 9%). We apply the 72 rule -- a crude but remarkably efficient rule that says (% growth) x (number of years to double) = 72. We find that to bring current p/e's down to the historical average, we must double the earnings by continuing with the highest recorded sustained earnings growth (9%) for 8 years (9 x 8 = 72) WITH NO CHANGE IN STOCK PRICES. Can't happen. A 50% correction (DOW 5000) is the only way. I used to be a "bull". The guys who have been calling for a bear market since DOW 6000 weren't wrong, just early. NOW you mix in the catalyst -- y2k -- and kablam. (The sound of the market imploding.)
-- Dave (aaa@aaa.com), June 03, 1999.