Ken, thank you for the courtesy of your reply.
My rule of thumb is to look at the PE as representing the number of years that a company operating at a stable state would take to return my investment. If they are growing, or margins are increasing, the PE would be higher. I know what PE's are like today. But even at 10 - Who would trust a typical company with your money for 10 years?
I chose a putative PE of 10 for an 'operating Copytele' because because that's the sort of PE a disk drive maker might sport. (Remember the current 'non-operating Copytele' has an infinite PE.)
These days I concentrate on not losing money; the winners take care of themselves.
re: COPY, I simply wanted to see how badly I could get hurt if I'm wrong. My lame calculation suggests that if Copytele started shipping product, after the sudden spurt of surprise, the 'normal' value of the stock wouldn't make my risk more than ~$10 stock. Since I personally think COPY will drift to zero when production begins, the odds don't look bad.
However, given that I may be living on a parallel universe, or having flashbacks from too many 'schrooms, I am very curious as to whether folks who are buying the stock have done any math.
Since you do 'technical' trading, I understand that we live in parallel universes. I use the Market as a pricing mechanism, not an oracle.
Cheers,
Mike |
