T/A ETF AND INDEX

[stkboy1]

Here is another article on P/E ratio.......

http://fraudonomics.blogspot.com/2009/07/safe-haven-sp500-pe-ratio-is-now-at-723.html

Wednesday, July 29, 2009
Safe Haven | SP500 PE Ratio is Now at 723!

Before you dive into the market on the long side, consider the following article:

Safe Haven | SP500 PE Ratio is Now at 723!: "The historic rule of thumb is that the S&P500 is correctly valued with a price/earnings or PE ratio of 14, the market normally hits the area of 7 at true bear market bottoms, and 21 at bull market tops.

There are 2 types of PE ratio that S&P produce the first ratio is called the OPERATING Earnings. This is basically the PE ratio calculated with all the bad news stripped out, it is the make believe PE ratio that has very little to do with reality and only has any validity in the fantasy land of CNBC and Wall Street analysts. The other ratio are as REPORTED or real earnings, the giveaway is in the name as these are the earnings that are actually reported to the SEC via the 10Q form each quarter.

These reported earnings are the only reality, as another giveaway is that during every boom these 2 ratios fantasy and reality actually close up they become very close in value, and during every bust we get huge divergences. For example during the last bust the highest Reported PE ratio recorded was 46 which was also the highest PE ratio ever recorded in history! At this same time, the operating PE was 29.

Today with 53% of companies' results reported for the 2nd quarter 2009 the Operating PE is surprise, surprise "only" at 22.87. So according to CNBC and Wall Street the S&P 500 is fairly valued so please ignore reality, live in denial and BUY!!! Unfortunately the reality shown by the as reported PE is a truly mind blowing 723. I repeat 723, the previous all time high was 46."