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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 671.93

0.0%

Nov 14 4:00 PM EST

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To: American Spirit who wrote (79835)	7/10/2001 8:07:13 PM
From: David W. Taylor	Read Replies (2) of 99985

>> 8 points down in one day or the #1 storage company means it's a good buy >> When will you people realize that the raw numbers in a stock price mean nothing? The price of a stock should be determined by the value of the company plus a small premium, if prospects look good or a small reduction, if prospects are poor. Valuation is the number of shares outstanding times current price. Valuations should reflect the real growth rate of profits. Not revenues. Profits. On that basis EMC is worth around $16 at the current 21.2 P/E ratio. All the $8 drop did is bring the stock down to 50% overvalued. $16 is actually reasonable for this level of economic activity.

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