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Technology Stocks : Wind River going up, up, up!
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To: Mark Brophy who wrote (893)4/21/1997 7:22:00 PM
From: mac   of 10309
 
>Book value is a very sensible measure for a SW company.

Well, I must respectfully disagree.

It's a *useful number* but not a *sensible measure*
of the true worth of a company.

Stock prices reflect the future earning potential of a company, as
well as the present psychology with regard to that company etc. etc.
Whether or not you feel that WIND is awesome or that it is about
to "roll over", looking at the book value alone, which is my impression
of your post, says nothing about these determinants.

We have all seen many companies trading at fractions of their book
value, as well as many companies trading at large multiples of their
book values. It seems just as useful as looking at trailing earnings.
In truth, on their own, both really are useless.

regards

mac
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