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Strategies & Market Trends : Value Investing

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To: Bob Rudd who wrote (15758)	11/11/2002 10:39:54 PM
From: Mark Brophy	Read Replies (1) of 78667

What I mean by a "stable company" is one that is not a serial restructurer, grows slowly (or not at all) and has a predictable earnings stream. GE would fit this definition, but I would never buy it because I insist on honest accounting. Their games gave them a higher P/E than the general market for a few years, but now it sells for less because the market is no longer willing to put up with that nonsense. I don’t consider any write-off to be non-recurring, so I average earnings for the last 5 years, including all charges, when calculating P/E. So, I consider DuPont, 3M, and Target to be stable companies. Only DuPont has a lower P/E than GE. The link you gave calculates the P/E of the S&P 500 as 23, which is where Jeremy Siegel thinks is right.

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