AlphaNinja - "Multiple revision" cuts both ways.
As I write this, the Dow Jones Industrial Average is down 29% from the end of 2007. What's interesting to notice is that much of the downside is from "multiple compression" -->> meaning that people will now pay 10-11 times annual earnings for a share of IBM, when they previously would pay 17times, etc.
As bearish as I am on the economy, among the DJIA there is room to run for many of these companies, as 2009 and 2010 earnings will exceed those of 2007, despite the stocks selling for substantially less than they did in December '07. If people gain some comfort in the safety (reliability) of 2009/2010 earnings estimates, then the multiple, or amount paid for earnings will rise, and the DJIA could have loads more upside.