Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Tommaso who wrote (89558)	2/15/2001 10:24:07 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

T, Well, pe ratio is just one measure. For cyclical cos., the tendency is to carry big PE ratios when business stinks and low pe ratios when it is good. Hence, the energy situation. Many financials also have relatively low pe ratios, but I think they are more likely to be over than under valued. Here is where I see cheapness: Many metals cos. are cheap. North American Golds are selling at high pe ratios, but I don't think they are pricey. And South African golds are still cheap by any standard. Tie and Rti have had runs, but they are nowhere near previous cyclical highs. They have no earnings, yet, so the pe ratios are NA. Many closed end funds are cheap, especially the foreign funds. They are selling at big discounts and cyclically low prices for the stocks in the portfolios. Biotechs are not cheap by many measures, but if one has a hot product likely to hit in the next year or two, there is money to be made. It is almost impossible to value a co. that has nothing and MAY have something. The main thing is not what it is worth if it happens, but the probability of it happening. Since that is a tough game, many bios are under priced and many are over priced. I just wish I was better at separating them. <g>

To: Tommaso who wrote (89558)	2/16/2001 2:02:20 AM
From: Dave Feldman	Respond to of 132070

Gee, I'm not sure I agree, Tomasso. There are more than a few cheap small- and mid-cap stocks out there. Just not in so-called sexy industries. Non-tech small caps have been in a bear market for years, and then are bargains out there, although research is clearly more difficult than large caps. Want some ideas? Take a look at the reports and prospectuses of some appropriate mutual funds, such as Oakmark, Third Ave., Wasatch, Longleaf, Mutual Shares/Discovery, etc. for ideas. Value Line. Barron's. I agree that low P.E.'s are not the be-all and end all in valuation. But when you find a steady grower with high R.O.E. and a low P.E., you have to perk up a little. I have to admit I have a penchant for buying mediocre companies that are cheaply priced (as CIT or BNN were when I bought it) rather than good companies w/moderate valuations, but I think either technique can work.