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Technology Stocks : Semi Equipment Analysis

SOXX 296.26

-3.9%

Nov 4 4:00 PM EST

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To: Return to Sender who wrote (54745)	11/28/2011 4:51:19 PM
From: Jacob Snyder	1 Recommendation Read Replies (1) of 95358

<the actual P/E ratio here> That chart is of the PE10. It uses 10-year trailing GAAP earnings, per Schiller. Other PE charts use pro forma, or 12-month trailing, or expected forward earnings. It is possible to use PE to justify bullish or bearish conclusions, depending on what definition of the E in PE is used. Many valuation discussions are really apples-to-oranges comparisons. I prefer using PE10, because trailing 12-month earnings are always a lagging indicator, at stock market turns (both tops and bottoms). And forward earnings estimates are random numbers. I prefer using GAAP, with all its faults, because at least it is consistent. The definition of Pro Forma earnings is different from company to company, and even quarter to quarter. <I don't mind a solid fact filled disagreement> I invite it. If I'm wrong, I want to know it. I don't mind being wrong; I do mind losing money.

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