" I will buy lightly from 78 on down " What if the stock keeps going down to the drain from $78 ?
" Growth rate below PE ratio = no good " , well, let me teach you a new rule in the stock market." Growth rate below PE ratio = good ", just look at DELL, Yahoo,
AMAZ , AOL , CSCO .....etc. These stocks can break up your stupid rule " Growth rate below PE " and keep going up. Just look at DELL, CSCO , Yahoo, AOL, they continue to grow fast, and continue to show that the growth rate is below PE ratio for many years, If those stocks are just momentum play like you said, how can it last for so many years ? The reason those stocks can enjoy a high PE is because its growth, and that they are in the forefront of the new industry, and the market potential for those companies is enormous and they continue to prove it quarter after quarter.
That is why growth rate below PE ratio = good. I hope you will remember this new rule and digest , also remember that the rule is invented by me.
As to Growth rate over PE ratio , I will say it is not good. This only shows that
the products of those companies do not have much future potential, and the growth
is not fast enough, and will probably slow down in the near future. That is the reason
why those stock never appreciate fast enough to enjoy a PE ratio which will be higher than the growth rate. Just look at those stocks in the traditional industry, you will see a lot of them with a low PE and low growth rate.
So, again, use your brain !!!!!!!!!! Don't just remember those rules. |
