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Non-Tech : General Electric (GE)

GE 307.21

+1.8%

Dec 19 9:30 AM EST

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To: TechMkt who wrote (922)	8/9/1999 5:29:00 PM
From: Bill Martin	Read Replies (1) of 3256

Re: Can't understand it. GE is making money hand over fist. They have steady 14% growth. Well, you're probably aware that for a large stable company with 14% growth there is a line of argument that they should sell at a P/E of 14 (give or take). They've blown waaaay past that by 2x+. Obviously it isn't just GE -- the whole market is overpriced on this basis. Before anyone jumps all over me, let me state that I am long GE as well as a bunch of other stocks which are even more over priced. I don't personally believe the P/E argument is a determining one, but I do believe that it's one you can't entirely ignore because there are other buyers/sellers out there who do follow it. The "ideal" P/E however (whatever that may be) is mathematically related to interest rates. When rates go up the market will drop in response. People currently expect the rates to go up again. Anyhow, the whole market is down over the past few weeks. One can't expect GE to continue to rise to the sky forever in the face of a falling market. Bill

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