Dell Technologies Inc. Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc.

DELL 122.46

-8.5%

Nov 17 3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: ace al who wrote (68754)	10/2/1998 9:03:00 AM
From: LWolf	Read Replies (1) of 176387

ALT & All... a good write up on deflation and its impact on future earnings growth. From Mark Johnson's news letter, referring to economist Gary Shilling's new book, "Deflation" techstocks.com Excerpt: Future Earnings Growth Worth More Compared to older industries Shilling forecasts that companies that utilize technology will be able to better retain and expand earnings in the future. Part of this will be due to innovation, part to demand for new products, and part to the legal protection afforded technological advances. One point that was not emphasized in the book, and should have been, was that in an economy where deflation is occurring the present value of future earnings soars - which is why companies that can grow earnings in such an environment are worth much more today than they have been historically. When discounting future earnings to the present the impact of deflation on the value of future earning streams compounds. This results in a fair price/earnings ratio in a deflationary environment being a multiple of the price/earnings ratio you would expect in a mildly inflationary environment like we have experienced the last few years. While the current valuations of some technology stocks - especially Internet stocks - are absurdly high in our opinion given the risk, a deflationary environment could justify such valuations for technology companies that could grow earnings.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next