S&P then and now

Scott Jagow Jun 4, 2007
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S&P then and now

Scott Jagow Jun 4, 2007
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TEXT OF INTERVIEW

SCOTT JAGOW: So last week, the S&P 500 finally returned to its record high set back in 2000. Our man on Wall Street, Allan Sloan says there’s a difference between this S&P and that one.

ALLAN SLOAN: The difference is, in 2000 — I have these numbers hot off the presses at S&P — in 2000, the index was selling at 25.5 times the earnings of the S&P 500, which is an enormous number. As of Wednesday it was selling at 17 times profit, which means there’s much less excess in the market now than there was in 2000, and in 2000 even I who am very reluctant to make market goals was saying ‘this is insane’ and ‘this is gonna end.’

JAGOW: Well let me see if I get this straight: You’re saying that it’s a leaner, meaner S&P 500 that’s more accurate?

SLOAN: Well it’s certainly leaner and meaner and less risky. I’m not telling you it’s not risky; it’s much less risky now than I was in 2000. In 2000, I was fleeing the S&P 500 as a personal investor and now I’m not.

JAGOW: What do you think has kept the broader market, the S&P 500, lagging behind the Dow?

SLOAN: The Dow has got only 30 stocks in it and there are all sorts of flukey things and technology, which is where the excesses were in 2000 in the S&P, technology was a much smaller part of the Dow in 2000 than it was of the S&P, so the excesses were less and the fall was less. It’s just fascinating to me that, you know, it’s taken seven years to get back here, which is an awfully long time. I mean, do you know how much more hair I had seven years ago than I do now, and my teeth were all of my own back then and everything. On the other hand, I’m not gonna be able to write my column saying the S&P still below where it was, so I’ll have to actually look for other work.

JAGOW: Speaking of looking for other work, you’ve already found it.

SLOAN: Well that’s true. Come July, I’m going to have Newsweek where I’ve had a lot of fun for 12 years and I’m going to be a senior editor at large at Fortune, but I hope my attitude doesn’t change.

JAGOW: It wouldn’t be the same without the attitude Allan.

SLOAN: Right well maybe my next job can be the founding editor of Attitude magazine.

JAGOW: Well congratulations on the job and we’ll look forward to contuing this while you’re at Fortune.

SLOAN: Sounds good, I’ll see you sometime in July then.

JAGOW: Allan Sloan, formerly of Newsweek, soon to be with Fortune.

TEXT OF INTERVIEW

SCOTT JAGOW: So last week, the S&P 500 finally returned to its record high set back in 2000. Our man on Wall Street, Allan Sloan says there’s a difference between this S&P and that one.

ALLAN SLOAN: The difference is, in 2000 — I have these numbers hot off the presses at S&P — in 2000, the index was selling at 25.5 times the earnings of the S&P 500, which is an enormous number. As of Wednesday it was selling at 17 times profit, which means there’s much less excess in the market now than there was in 2000, and in 2000 even I who am very reluctant to make market goals was saying ‘this is insane’ and ‘this is gonna end.’

JAGOW: Well let me see if I get this straight: You’re saying that it’s a leaner, meaner S&P 500 that’s more accurate?

SLOAN: Well it’s certainly leaner and meaner and less risky. I’m not telling you it’s not risky; it’s much less risky now than I was in 2000. In 2000, I was fleeing the S&P 500 as a personal investor and now I’m not.

JAGOW: What do you think has kept the broader market, the S&P 500, lagging behind the Dow?

SLOAN: The Dow has got only 30 stocks in it and there are all sorts of flukey things and technology, which is where the excesses were in 2000 in the S&P, technology was a much smaller part of the Dow in 2000 than it was of the S&P, so the excesses were less and the fall was less. It’s just fascinating to me that, you know, it’s taken seven years to get back here, which is an awfully long time. I mean, do you know how much more hair I had seven years ago than I do now, and my teeth were all of my own back then and everything. On the other hand, I’m not gonna be able to write my column saying the S&P still below where it was, so I’ll have to actually look for other work.

JAGOW: Speaking of looking for other work, you’ve already found it.

SLOAN: Well that’s true. Come July, I’m going to have Newsweek where I’ve had a lot of fun for 12 years and I’m going to be a senior editor at large at Fortune, but I hope my attitude doesn’t change.

JAGOW: It wouldn’t be the same without the attitude Allan.

SLOAN: Right well maybe my next job can be the founding editor of Attitude magazine.

JAGOW: Well congratulations on the job and we’ll look forward to contuing this while you’re at Fortune.

SLOAN: Sounds good, I’ll see you sometime in July then.

JAGOW: Allan Sloan, formerly of Newsweek, soon to be with Fortune.

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