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From: | Brian Gale <brigale@i4free.co.nz> |
Date: | Mon, 18 Sep 2000 16:31:20 +1200 |
A few comments on the article Ben posted The article constantly comes back to the fundamental aspects of profitability and dividends and the fact that compounding profits determine the ultimate success of an organization. What we now see in the US are prices which are often completely unrelated to realistic profit expectations. That market is driven by price and I suggest that the majority of private investors/traders wouldn't have a clue as to P/E or any other indicators. If the price is going up that is a good share to have - nothing else. I wouldn't be surprised if the brokers help to pump up prices by steering unknowledgeable private investors. The NASDAQ is a unique phenomenon which IMO must eventually come back to some sort of logical assessment - the only question being when.............. There have been constant fears of a major correction, which seem temporarily to be more subdued as the over-optimism holds sway but.................. All is driven by the so called 'technological revolution' . Whilst the achievements in computer development and the Internet are remarkable and all look to the success of Microsoft, Intel and others to be repeated IMO we are headed for a levelling out which will see many of the high flying ideas come to naught. We can't compare the US & NZ markets. As has been said before it is like comparing cheese with chalk. We can't use the same principles applying in the US to NZ. A while ago on Sharechat there was constant reference to how the NASDAQ was moving but Ben posted (Back to the NASDAQ 1/8/00 ) that it had little bearing on the NZ market. I feel that we have to stick with fundamental measurement is assessing NZ shares. If we try the rising price idea (if we can find any) and ignore fundamentals with NZ shares we would surely fail. This has happened with some of the 'penny dreadfuls' which seem to be favoured by some Chatters. It is interesting that there are different tax rates in the US for capital gains and dividends - with cap gains lower. This could have a bearing on some companies not paying dividends but retaining profits ? BG ---------------------------------------------------------------------------- http://www.sharechat.co.nz/ New Zealand's home for market investors http://www.netbroker.co.nz/ Trade on Credit, Low Brokerage. Join now. ---------------------------------------------------------------------------- To remove yourself from this list, please use the form at http://www.sharechat.co.nz/forum.shtml.
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