"When credit dries up what happens to the E?It goes down way...

"When credit dries up what happens to the E?

It goes down way down."

just compare a PE of 14 with one of 9

instead of stock being worth 14 time earnings it is five earnings less

eg

forecast earnings = .10

14 x .10 = $1.40
9 x .10 = .90

the stock has lost 50c or 35%

surely things like less credit, less spending has been factored into the price

the question is how much?

I think that most of the bad news is already factored into the price


the rest is hysteria caused by talk of depressions that will last ten years or in some cases people are saying 20 years

what we have to realise is the nature of this arguement

it is about the future

the future hasn't happened yet

also we are dealing with a subject where a lot of people with a vested interest ie they have cash and they want to buy cheap...as well as a lot of plain out and out sickos are given credence