Disk Drive Sector Discussion Forum Message Board

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Technology Stocks : Disk Drive Sector Discussion Forum

WDC 140.23

-8.9%

Nov 20 3:59 PM EST

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To: Z Analyzer who wrote (2975)	4/12/1998 10:02:00 AM
From: tom pope	Read Replies (1) of 9256

>>Paul Fox of Montgomery Securities has also talked of one times book at the bottom<< I don't think that 1X book is meaningful unless an adjustment is made for the extraordinary expansion in price to book ratios since 1991 (the comparison year used by Munson) I don't have the figures for average p/b in '91, but in '93 the Dow's p/b was 3.02. Today it's nearly 6X. That might make 2X or even 2.5X book the equivalent benchmark for the drive makers. Mark Adams already pointed this out in an earlier post, but I thought it might be worth re-emphasizing. (BTW, I'm just talking about comparative ratios,not that I think 6X book on the Dow isn't scary.)

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