Cisco and the kids

The Nasdaq 100 Index is today's reincarnation of the Nifty Fifty. Many of t oday's institutional favorites feature extraordinary valuations, despite sh ort operating histories, modest revenues, and sparse profits. At the market peak in 1972, Nifty Fifty stocks sold at an average PIE of 37.3-versus a m arket multiple of 18.2. At the 2000 peak, the Nasdaq 100 sold at an average PIE multiple roughly six to eight times greater than the highest P/E ever accorded Nifty Fifty stocks. Following a historic stock market correction o f more than 70 percent, P/Es for Nasdaq 100 companies remain two to two and a half times higher than peak P/E valuations for the Nifty Fifty.