Larry,
I just heard Maria Bartiromo on CNBC say that the S&P is trading at 17 times earnings. The info on my Ameritrade account calls it at 34 times earnings. That's quite a difference were is she getting her information?

Gary

Gary, in keeping with the Bubblevision tradition, I'm sure she's using pie-in-the-sky projected earnings. Whereas it sounds like Ameritrade is using trailing earnings.

Larry

Larry,
How much would earnings have to increase to bring the P/E down to 17. Seems like it would be a lot.

Gary

Gary, it depends on what the market does. If you make an assumption that the market stays where it is now (which of course it won’t) and if you use Ameritrade’s p/e ratio of 34 (Bloomberg has it at 29), then earnings would have to increase by 50% to bring the p/e down to 17. I think the p/e will eventually get down to 17. In fact, I think it will go well below that. But I think it will be as a result of lower stock prices, not higher earnings.

Larry

Larry,
I think I'm going to have to agree with you. It would sure be nice if my restaurant would increase its earnings by 50% in one quarter. Probably happen about the same time that pigs fly.

Gary

Larry,

If the S&P index stays the same, its earning needs increase 100% to get P/E from 34 to 17.

Zack

Zack,

That's correct. Thank you.

Larry

Larry,
So does that mean there's a good chance the restaurants going to really start booming any time now? I guess according to CNBC it will. The reality is that business picked up for about 3 weeks then went right back to what it was. I'll bet dollars to donuts that the same thing happened in most other companies around the country.

Gary

Gary,

I just noticed that you said you own a restaurant. I have recently started considering staring a restaurant business (Asian food). I am interested in learning how to build a succesful system so that I can eventually expand with the help of itself and others working within the system. I wonder if you know any books that you can recommend. Any suggestion would be appreciated.

Thank you in advance!

Sam

Sam,
You might want to read E-Myth by Michael Gerber and McDonalds, Behind the Arches by John Love. Personally I bought a franchise because I didn't want to go through the long learning period. I was willing to pay the weekly royalties in return for a proven system, a much greater success rate and a national advertising program.

Gary

Gary,

I very much appreciate your input. I will definitely take a look at the books you recommended.

Sam

E-Myth is a great book, working "on" your business vs. working "in" your business is ultimately what separates "business owners" from "self-employed"...

I'm closing on my first franchise in the next 2-3 weeks and have the same reasons for doing so, advertising power, support systems and a proven business plan...

Not only that but I don't want to get laid off ever again LOL!!!