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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 78.94+1.3%1:14 PM EST
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To: GVTucker who wrote (67356)3/13/2005 4:17:01 PM
From: Dave  Read Replies (1) of 77400
 
GVTucker,

All I know is that investing in high PE stocks has underperformed low PE stocks over time.

I believe that David Dreman, also, maintains that thesis, i.e. that the future returns of low P/E ratio stocks are higher than the future returns of high P/E ratio stocks.

Howevever, what the P/E ratio fails to "take into account", in a way, is a company's Return on Capital and Capital Reinvestment requirements (Capex).

Dave
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