INTEL SUPPORT GROUP - the sky is falling!!!! Message Board

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Technology Stocks : INTEL SUPPORT GROUP - the sky is falling!!!!

INTC 37.04

-6.2%

Nov 4 3:59 PM EST

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To: Zachary Fluhr who wrote (25)	3/14/1996 10:10:00 AM
From: Burt Masnick	of 248

Zack - There are three things to consider here. 1 - The pe for the S&P500 has ranged anywhere from a little below 10 to around 22 in the past 10 years. 10 is not the "right" number, 15 is not the "right" number, 20 is not the "right" number. The multiplier has fluctuated in the past and will fluctuate in the future. I myself think that the current valuation for the overall market might be high, but we are seeing massive inflows to funds, light inflation, low to medium growth and moderating government expenditures. 2 - I heard two tech fund managers indicate that when a growth stock with predictable earnings growth has a pe lower than the growth rate, it is a strong buy indicator. Why would this happen to a growth stock. Because the market has extended periods of foolishness. This indicator is not a sell signal - its a buy signal. If you buy here AND the growth predictions are accurate you will make money because your stock will appreciate 3 - No single indicator should be followed slavishly. There may be a good reason that the stock price is down (Micron comes to mind). All I meant to indicate is that IF you believe, as I do, that INTC will grow at around 15-20% a year for the next couple of years, the price today is real low. If Coke or GM or Telephone are selling at 15 times earnings, then maybe there is a little upside potential but a hell of a lot of downside potential. But everymarket is ultimately the sum of all the opinions on the direction of future earnings. Some people bought Gold at $800 an ounce, some bought Micron at $90, some bought INTEL at $78 and some bought Netscape at $170. The markets give us wonderful opportunities to be foolish. Free advice is worth every penny. The above is my opinion and reflects some of my attitude towards the buy decision. That's easy. The tough one is the sell decision. Burt

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