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To: mcweazy who wrote (6627)	11/18/2000 7:20:10 PM
From: ED_L	Read Replies (2) \| Respond to of 8046

Good stocks like CSCO can have terrible P/E ratios(or even a P/E of 0) and still do well. I look at Quick Ratio, Current Ratio and Revenue/Employee. Generally try to pick stocks with Quick and Current Ratio less than 2.5(preferably less than 1.5) and revenue per employee of greater than $150,000. For example CSCO has Quick of 1.67, Current Ratio of 2.25 and Revenue/Employee of $633,324 so it passes my test. ISEE has a Quick ratio of 1.35, a current ratio of 2.249 but fails the test of Revenue/Employee with only $40,024 (If a company is not even generating enough to pay the cost of employee's total salary, benefits and overhead costs its hard to see how stock price will appreciate).

To: mcweazy who wrote (6627)	11/19/2000 11:57:36 AM
From: bobby is sleepless in seattle	Respond to of 8046

hi mcwezy, price/sales,, the measurement most analysts favored when internets had no earnings slated for the near future or if ever,,,to level the playing field for valuation, so yes another way of justification. forward looking revenue growth already built into many of the high flyers' stock price are still too high as argued by most...so the pe ratios appear to be too lofty for the high flyers??...or not??? we remove the excess and return to levels which may bring the buyers back?,,,what's right? PE's within retail look great, tho compared to sector averagers i haven't looked... the chip sector, what's the average, its performance amongst peers, attractive enuf? If the tendency is for the market to overshoot on both sides, i wonder if these ratios will really matter... for the fundamentalist, i guess it's part of the equation along with cycles, current events...a bunch of factual data suggesting there may be more dark before dawn. So the technician in me looks at the charts and remains defensive based on fundamental events....and I await till something changes... price will lead and the fundamentalists will follow... bobby techno-fundo