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Technology Stocks : Semi Equipment Analysis

SOXX 306.28

-1.0%

Dec 4 4:00 PM EST

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To: Return to Sender who wrote (6375)	10/22/2002 9:29:14 AM
From: BWAC	Read Replies (1) of 95525

<But how do we explain the P/E ratio> RTS, During those periods the interest rate was high. CD rates 10%ish. That we know. Right? Dividend rates should correspondingly be higher than normal as well. Not much money in stocks when interest rates are 10% risk free type of thinking. Higher dividends had to be offered to entice continued investment possibly. Leaving the question of PE and how the dividend yields got to 6% or 7%ish. Two ways that I see. Either stock prices fell with constant static dividend amount. Or dividend amount increased. Given the terrible economic period, I doubt dividends increased as profits more than likely were not increasing either. (Maybe some of your referenced sites could answer this?) So in theory to achieve a "market yield" of 6%plus, the stock price had to fall. Thus the PE's fell as well. A PE of 30, yield of 2% or 60 cents, earnings of $1.00, stock price of $30. Could have become: A PE of 10, yield 6% or 60 cents, earnings of $1.00, stock price of $10.

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