The Stingy News Weekly (12/07/01)
The Markets This Week
DOW 30: 10,049.46 +2.01% to a P/E of 27.9
TSE 300: 7,616.80 +2.57% with a negative P/E
The Value View
Dow at a P/E of 20: 7,204 (-28.3%) Poor Value
Dow at a P/E of 15: 5,403 (-46.2%) Fair Value
Dow at a P/E of 10: 3,602 (-64.2%) Good Value
A New Stingy Contest
Figure out how much the XXY company is worth for a chance to win a copy of Jim Otar's new book "High Expectations and False Dreams: One Hundred Years of Stock Market History Applied to Retirement Planning."
"It's Christmas again, time to celebrate the transformation of Ebenezer Scrooge. You know the ritual: boo the curmudgeon initially encountered in Charles Dickens's A Christmas Carol, then cheer the sweetie pie he becomes in the end. It's too bad no one notices that the curmudgeon had a point"
"Ignorance about tomorrow is a constant of human affairs. Submission to this truth is what's variable. In finance, submission entails a healthy fear of leverage and a decent respect for the relation of price to earnings."
"Generally accepted accounting principles are left in the garbage when companies hype earnings by excluding all manner of costs as one-time events--ranging from payroll expenses to layoff costs to inventory writedowns."
The stock market level in historical perspective
"By historical standards, the U.S. stock market has soared to ex-tremely high levels in recent years. These results have created a sense among the investing public that such high valuations, and even higher ones, will be maintained in the foreseeable future. Yet if the history of high market valuations is any guide, the public may be very disappointed with the performance of the stock market in com-ing years." [PDF File]
Today safety comes first
"It's not that you're turning tail. It doesn't mean you're a wimp. Let's just say your interest in supersafe investments shows a newfound respect for the market's mean streak." - Um, doesn't safety come first everyday?
The trivia questions this week are:
Q1. What is the median P/E of the TSE 300?
Q2. What is the median P/Book Value of the TSE 300?
Q3. What is the median P/Sales of the TSE 300?
The answers for last week's trivia questions are:
Q1. What is the median P/E of the S&P 500?
Q2. What is the median P/Book Value of the S&P 500?
Q3. What is the median P/Sales of the S&P 500?
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