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Peter Namtvedt wrote:
>
>
> TheGonch:
>
> Please do try to make the case... we are all ears.
>
> PeteNa
> petena9090@xxxxxxxxxxxxxx
Where to begin? (sigh) So I won't try...but I will try to explain it a
bit better:
There are three kinds of 'facts':
historical facts (eg, PE ratios have never been this high)
future facts (eg, the market for PCs will double in xx years)
current facts (MOT earnings falling due to weakness in Asia)
suffice it to say, the historical facts on the whole support the bearish
case. It is comfortingly easy to quantify, although that doesn't make it
any easier to pick the top.
The bullish case is based mostly on future facts, which are predictions,
not facts in the normal sense at all.
There are many current facts in support of both the bullish and bearish
case, but each current fact is usually too small to be important by
itself.
My decision to compare borrowing costs (after tax interest rates) to the
market (1/PE) is an attempt to come up with a current fact with more
oomph. That one says the bull can continue. We will now start seeing
whether earnings, and prospects for future earnings, are suffering.
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