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Technology Stocks : Semi Equipment Analysis
SOXX 296.74+1.8%Nov 28 4:00 PM EST
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To: The Ox who wrote (85424)8/4/2020 8:35:27 PM
From: Sun Tzu1 Recommendation

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   of 95487
 
With cyclicals (really with most stocks that are not in hyper-growth stage), PE10 is the best way to measure them.

Figure out the average EPS for the last 10 years.
Divide by the average price in the last 10 years.
Divide by the average 10-year TBill rate (or even better, the 10-year AAA bond yield).

Compare this number with the earnings' yield based on the last 2Q+estimate of the next 2Q - divided by the current 10yr TBill/Bond yield.

How does it compare? Good? then buy the stock and don't look at it for another few years. Bad? Then trade the momentum and buy/sell options.
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