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Non-Tech : The Good Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: BWAC who wrote (37)	5/26/2000 2:41:00 PM
From: Mark Adams	Respond to of 85

There was a time when a PE of 10 was an investment guideline. Especially so for mature companies. I think there is room for great error in using PE >= Growth Rate thinking that I see today. This seems to be a short hand way of looking at the Net Present Value of future income streams that I think falls apart at extremes, and ignores changes in the "risk free" interest rates. I've come to understand the importance of not misusing PEs, but if you give me a yield of 6-7% and a PE of 10, I can usually be comfortable owning the stock. After searching the 10k for hidden bombs, which usually doesn't happen until I actually own a few shares. <grin>