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Technology Stocks : Silicon Graphics, Inc. (SGI)
SGI 93.81-0.5%3:59 PM EST

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To: Marc Schiler who wrote (1289)5/1/1997 1:17:00 AM
From: sea_biscuit   of 14451
 
Marc :

I based my computation on the 5-year historical high P/E of two other companies in about the same business -- SUNW and HP, which were 31 and 26 respectively. I don't think those ratios were attained when the companies hit an earnings glitch and the P/E was artificially high for a while (like it is for SGI now, at 76 or so), and therefore those numbers are reliable, in my opinion.

And yes, those who sat through "6 quarters of disaster" will find it very hard to believe in the "unending growth promise" (just like divorced people might find it very hard to believe that they will ever have a happy marriage again!) but there will always be a new batch of investors who will get interested in the stock when the company is doing well, and they will believe anything (just like folks who were never married might believe that marriage is heaven!) :-)

Regards

Dipy.
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