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Technology Stocks : America On-Line (AOL)

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To: larry who wrote (11571)4/19/1999 7:00:00 PM
From: Dennis J Baltz  Read Replies (1) of 41369
 
Larry

Valuation and momentum are two different things and both are very important. But I don't believe AOL is overvalued. Use the PE/Growth Rate calculation for GM, GE, MSFT and AOL and other top blue chip stocks and you will find all their PEG's have similar valuations. You must compare industry leaders with industry leaders though. Coke who is #1 vs Pepsi who is #2 won't work because Coke is the industry leader and they historically demand higher PE ratios.

Momentium is quite different. Fighting momentum is like trying to catch a falling knife. My Mother told me to never try to catch a falling knife or fight the momentum of the market. And my Mother wouldn't lie to me. Especially about the market. :)
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