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> The rapid rise in the price-earnings ratio, which stood at 127 at the
> end of December
I've found it really hard to get any reliable P/E info on the indices.
It can be dang hard, even for individual stocks. For example,
Morningstar lists the P/E ratio of QQQ (Naz 100) as 46 as of 1/31/01.
They list SPY (S&P 500) as 31 on the same date. That number for SPY is
higher than the one on the S&P page, which is in the 20s, so Morningstar
doesn't appear to have any obvious optimistic bias.
> The nosedive in profits is tied to write-offs, the largest of which
appears
> to come from Excite@xxxx, the cable Internet company, which took a $4.6
> billion hit. Other Nasdaq 100 companies that took large write- offs
included
> Amazon.com, Yahoo and CNET.
ATHM is 0.09% of the index
AMZN is 0.24%
YHOO is 0.52%
CNET is 0.16%
Even accepting the dubious notion that one-time accounting games should
be included in earnings, those stocks are a tiny fraction of the
cap-weighted index. The big guns are CSCO, MSFT, QCOM, INTC, and ORCL.
Those 5 stocks make up over 25% of the index.
I guess what I'm saying is take any published P/E numbers with a grain
of salt. Maybe the Naz 100 P/E ratio really is 800+ like the quoted
author says and maybe it isn't. I would certainly never take one
person's word for it, especially when he is strongly contradicted by
another source, like Morningstar. Lies, damn lies, and statistics, as
the wise man once said. :-)
--
Dennis
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