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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Investor2 who wrote (507)	7/24/2000 4:13:24 PM
From: rsie	Read Replies (1) \| Respond to of 10065

that would be the mother of all buying opportunities....8)))

To: Investor2 who wrote (507)	7/24/2000 10:39:47 PM
From: Hank Stamper	Read Replies (1) \| Respond to of 10065

I2, Re: Dell From the Standard and Poors stock report, historical P/E ratios: Year...High..Low 2000...90....51 1999...73....19 1998...41....10 1997...23....04 1996...18....06 -------------- Mean 49 18 Grand Mean 33.5 Now, it seems that Mr. Market has been rather fickle with Dell stock. Sometimes, like today he is very optimistic about the grand future of the company and wants to pay in the 80 dollar range for a dollar of current earnings. At other times, he is downright negative and is willing to pay 6 bucks for the same current earnings. Now, what if today was the day that Mr. Market was at his gloomiest with Dell and offered 6 bucks for a buck of earnings. That's $3.84 a share. Okay, Mr. Market would have to be really depressed, maybe even suicidal to offer that low a price. Let's just say he is at the mid-range. At current earnings, of .61 and a p/e of 33.5 he'd offer $21.12 per share. Just to get to the mid-range in valuation, and that is not a difficult assumption to suggest from the table above, Dell would have to lose 50% based on today's today's earnings. Of course the case may be made that in a bear market, mid-range in P/E is unrealistic. I wonder what sort of response this analysis would generate in the Dell thread? <g> Ciao, David Todtman