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For those of you old enough to remember the dotcom boom – and subsequent bust – the period of time can be summed up by a lack of substance. Firms during the period were judged solely by their ability to generate sales. If a stock was selling more and more routers, semiconductors or pet supplies online, it was worthy of higher and higher valuations.

Well, we all know how that turned out for the Pets.com sock puppet. A straight shot downwards, and then doing commercials for subprime auto lenders.

The key was that investors forgot about earnings when looking at stocks during the dotcom boom. The problem is, we might be doing the same thing these days. Prices have risen, but the “E” in P/E hasn’t.

While we are nowhere near the triple-digit P/Es of the dotcom boom/bust, the lesson still rings true. Focus on earnings and the investment will take care of itself.

Riding High on Euphoria

After roughly six years of gains, the market may be getting a tad expensive. And it’s only gotten worse since the so-called “Trump Bump” has persisted. Since the election of Donald Trump as president, stocks have hit new record highs and it doesn’t look like they’re stopping anytime soon. The thing is, corporate profits haven’t exactly been surging to justify the higher prices.

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