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Technology Stocks : TAVA Technologies (TAVA-NASDAQ)

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To: C.K. Houston who wrote (15016)4/17/1998 5:53:00 PM
From: Loren  Read Replies (1) of 31646
 
Cheryl -

Price = Earnings/Share * PE Ratio... right?

If one is a long-term investor, he/she focuses on:

a. Earnings growth;
b. A PE ratio which is consistent with the growth rate;
c. Price growth over the long haul.

However, if one is a short-term investor, the earnings number in the equation above isn't going to change often enough, so he/she's going to have to work on the PE ratio alone.

You get that through excitement in the market, persuading the market to award the stock a higher PE ratio than yesterday.

Can't blame anybody for wanting the PE ratio to go up... but I guess the salient question is:

What kind of person is Scott? One who focuses on earnings, or one who focuses on the PE ratio? I, for one, hope he is the former...

Loren
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