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Technology Stocks : THQ,Inc. (THQI)

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To: Dave Hanson who wrote (6341)6/24/1998 10:27:00 PM
From: Jim Fitzgerald  Read Replies (2) of 14266
 
Large vs. Small...

As of today KO (Coke) is selling for 51 times earnings. The projected 5-year growth rate is 17%. THQI is selling for 14 times earnings. The projected 5-year growth rate is 28%. Everyone is buying KO for its liquidity - they can get out of it. What happens when they all try to get out of it at the same time? In the past, small cap stocks have suffered the most in market declines. This is because they have historically traded at higher multiples. This market is upside down. At some point (possibly now), we will enter a protracted period during which money will shift from liquid stocks to growth/value stocks.
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