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To: Ex-INTCfan who wrote (22998)	9/29/2000 11:31:00 AM
From: Perspective	Respond to of 436258

<There are some good valuations out there -- MSFT, INTC, now maybe AAPL> I hate to burst your bubble <g> INTCfan, but their prices are nowhere near historical norms. While we have all gotten used to the absurd PE ratios, historical norms for mature companies in saturated markets (like those of MSFT, INTC, and AAPL) run in the middle teens. And there's a reason for that: 1/(bond yield of 6%) = PE ratio of 17, risk-free. One thing that has been long since forgotten is that the risk premium ascribed to stocks is not so much compensation for the earnings flow risk as it is compensation for the liquidity risk inherent in stocks as an asset class. A critical distinction, lost on the New Error types. They will relearn, and soon... BC