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Strategies & Market Trends : Analysis Class for Beginners

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To: Arthur Tang who wrote (787)	5/8/1998 11:31:00 AM
From: Arthur Tang	Read Replies (1) of 1471

In investing, is there a situation where all the stocks are too high in price? Out of over 8000 stocks and equally large number of mutual funds, each one company has a different future. If each future is different, how can you draw a conclusion that earnings ratio to price is too high for every stock. Nothing to buy? Certainly for most investors, the concern is what is the potential of a stock in price. The amount of money you have to invest can only be profited by a percentage of gain. If the stock can go up 300% this year, you should put all your money on that stock. Does P/E ratio have any thing to do with the price? Not much, if revenue and gross profit keeps on going up, while overhead keeps on being reduced by computer efficiency. How do you know the stock will go up another 300%? Economy continue to improve? Technical analysis reveals past 300% increase? Earnings improvement tied to management decisions? Revenue increase due to management's focused direction? Ask those questions and you will separate the good companies from the also run. Investment is that simple.

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