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Technology Stocks : Hewlett-Packard (HPQ)

HPQ 22.29

-2.7%

Dec 31 3:59 PM EST

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To: Dave B who wrote (2919)	6/5/2003 10:21:46 AM
From: Oeconomicus	Read Replies (2) of 4345

Pardon me for butting in, but why would you expect either of those books to discuss P/S ratios? Brealey and Myers were concerned with corporate finance (capital structure, investment decisions of the firm and the like) not equity analysis. Sharp, if his text is anything like the four I have on investment analysis and portfolio theory, surely wrote mostly about CAPM, discounted cash flow models, efficient market theory and the like. Even the PE discussion probably wasn't more than 5-10 pages out of 600-800 (and it was probably described as not particularly helpful). Anyway, none of these texts mention Price/Cash Flow either - that doesn't make it meaningless. Anyway, the bottom line about all these ratios is that any one of them can mislead you at times, so you should look at a combination of them and, more importantly, don't stop there - try to understand the company behind them and whether there is a good reason for them to be at the levels they are. And nobody lecture Duke - he'll just get pissy. ;-)

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