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Technology Stocks : Silicon Graphics, Inc. (SGI)
SGI 93.20+1.6%Dec 1 3:59 PM EST

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To: Mathon Dabasir who wrote (3881)12/24/1997 2:16:00 AM
From: cape radical  Read Replies (1) of 14451
 
i don't mean to be disrespectful, but the first thing you learn in finance is that earnings don't matter. i could give a number of examples illustrating this point, i.e., is R&D an expense or an investment? the PE ratio can also obscure the prices of shares where debt is used wisely and not at all.

remember that value = present value of all future cash flows

at any rate, SGI has had a very disappointing return on invested capital, and that is why it's price is so "low". you are correct in portraying SGI as a financial underperformer.
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