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To: rb22982
"Won’t take 5-10 years. S&P is trading at about 11-12x 2009 earnings estimates (15x this year’s earnings). At that point, it’s grossly undervalued compared to the last 50 years."

No. Not so.

If you believe that, pick an S & P company; order up the current SEC financial filing; get a copy of the current financial report; take a pencil and paper and restate the earnings to GAAP--take amounts reported as gross income that have not been earned out of income; take below the line items that are not treated as expenses above the line as costs of earning the current income; restate compensation expense to reality by treating equity compensation as compensation; by treating true retirement plan costs as current expenses; by treating long term health care costs accruing in the current period as expenses. Read all the footnotes and restate the reported earnings to reality by historical GAAP.

You will find in most cases that the earnings have disappeared--that true P/E ratios are still above 50.

38 posted on 03/09/2008 7:03:26 PM PDT by David (...)
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To: David

The PE Ratio of the S&P 500 is 19-20x right now based on the entire 500 even with bills and billions in paper write downs in Q3 & Q4. There are a few companies with higher sure but overall it’s around 19-20 and estimated 15 for this year.


42 posted on 03/09/2008 7:08:27 PM PDT by rb22982
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To: David
The S&P is trading at 19.04x 2007 earnings ($67.90 EPS GAAP @ 1293.37).


45 posted on 03/09/2008 7:10:54 PM PDT by rb22982
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