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Politics : Ask Michael Burke
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To: re3 who wrote (68243)9/26/1999 12:40:00 PM
From: Knighty Tin  Read Replies (3) of 132070
 
Ike, Yes, the folks who bought Control Data and Mohawk and the scores of other tech stocks at high PE ratios got hit hard. But so did the folks who bought up and coming stocks. The mutual fund hit the hardest was The T. Rowe Price New Horizons Fund, which had many of today's big winners in the portfolio in embryo states. So, part of your formula is correct. It makes more sense to buy shares of high pe stocks when they are in the explosive growth part of their development, not when they are near maturity. However, it only makes sense to do so, at least in a big way, when the market itself is undervalued.

The index funds always pay too much for stories that are yesterday. That's the nature of their silly game.
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