Compaq Message Board - Msg: 372541

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Technology Stocks : Compaq

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To: hpeace who wrote (322)	10/20/1996 4:31:00 PM
From: Harry Landsiedel	of 97611

Thanx for your very informative posts on Compaq. You have brought some excellent insights only a one time insider could have. While your figures in your last post support your conclusion, data is history. You are assuming no "learning" can take place in the market regarding a stock. CPQ's performance this year indicates that it is pulling away from the pack. More and more the hi-tech area is being separated into winners and losers. The big winners are those who are leaders in their segment of the market. While CPQ only has a 10 share worldwide, it is still a leader. That may slow some of the volatility we have seen in the past and give CPQ a higher PE. I have seen the market change its opinion of Intel over the past year, with the PE moving up from about 10 in January to over 20 today. Before Intel was lumped with other semiconductors. Now it is treated as having a powerful franchise and compared with Microsoft,Coca Cola, and Gillette. (See this week's Barron's) Even if CPQ is volatile, the advantage of buying stocks with PE's below their growth rate is that when the price goes up you don't have to sell them, they're still undervalued. HL

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