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Technology Stocks : Semi Equipment Analysis
SOXX 296.74+1.8%Nov 28 4:00 PM EST

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To: Donald Wennerstrom who wrote (10618)7/16/2003 11:26:36 PM
From: Cary Salsberg  Read Replies (2) of 95487
 
RE: "PE"

A PE of 20 might be considered as a 5% earnings yield, while a PE of 50, as a 2% yield.

When government insured CDs yielded 5, 6, 7, 8%, high growth was required for stocks to "yield" less. Now, when yields on those CDs are much lower, higher PEs with slower growth seem acceptable.

In the case of INTC, what is a reasonable PE in this low interest rate, slow growth environment? Of course, we know that a pickup in the economy will raise interest rates and increase INTC's growth rate and this complicates our choice of reasonable.
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