Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 44.06

-3.2%

Jan 12 3:59 PM EST

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To: Road Walker who wrote (25673)	7/7/1997 7:17:00 PM
From: Harry Landsiedel	of 186894

Re: Intrinsic value article. A couple of more points about the article. 1. What I like about the comparison between earnings yield and bond yields (granted "earnings" can be inaccurate) is that it shows the trade off between stocks and bonds. This is important for many pension funds who shift large blocks of stocks or bonds based on the relationship. Thus when the two graphs get out of wack, it may be an important signal. 2. Another thing that can drive the earnings yield down of course it rising prices. In the June 30 WSJ (Abreast of the Market) one firm who studied the relationship between liquidity and stock prices found that for "every 10% increase in a stock's trading volume appears to lead to an 8% rise in its PE ratio." So in an ebullient market, trading volume or excess liquitity can drive up prices and lower earnings yields, artificially pushing apart the two yield curves. HL

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