Stock Attack II - A Complete Analysis Message Board

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Strategies & Market Trends : Stock Attack II - A Complete Analysis

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To: Captain Jack who wrote (17569)	9/3/2001 3:46:14 PM
From: Gersh Avery	Read Replies (2) of 52237

Hi Captain Jack OK .. what is P/E?: If a company has a P/E of 40, then, if every single penny of profit that company received was given to stockholders, at the end of 40 years the shareholder would have received back exactly the same amount of money that was paid for the stock. That would be 2.5% interest. (such a deal!) But, of course, these companies don't even give that money to the shareholders. The only hope for gain that "investers" have is to find someone else to buy the stock at a higher price. And somebody is going to be the buyer of the highest price. Since the amount of money that companies make has nothing to do with the stock holders gain, then P/E is only a marketing tool of wall street. Wall Street does NOT believe that holding stocks forever is the way to get rich! If that was the case, you and I would never be able to buy any! If you simply consider the wealth build up on wall street you should be able to realize that the real money with stocks is in the selling of them. Not the buying and holding.

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