SI
SI
discoversearch

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 : THQ,Inc. (THQI)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: dick west who wrote (10061)2/28/1999 7:21:00 PM
From: Quad Sevens  Read Replies (2) of 14266
 
On PEs and growth rates: Jeff, it can be misleading to look at historical PEs in a vacuum. The market PE is now higher than the average mostly due to the low inflation/low interest-rate environment. A fair PE for a stock must always be evaluated in relation to what a risk-free money market account would yield. Those yields are now very low--in the 4 to 5% range--which effectively means that cash is selling at a PE of 20 to 25. Back in the early 80s, money market accounts were yielding something like 15%--an implied PE of 6.7.

As for the little maxim that PE should equal growth rate: Who made that one up? What sort of mathematics is it based on? People repeat it all the time, but where does it come from?
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News