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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Bruce Brown who wrote (39443)	2/17/2001 3:20:40 PM
From: D. Newberry	Respond to of 54805

Hi Bruce, << Not that we are highly skilled economists, but it seems to linger in my memory that the historical record shows when we reach a point in the business cycle where the slowing down stops slowing so much, a slight uptick in inflation is a normal thing. >> That's an interesting point that I was not aware of. Certainly a one month uptick doesn't indicate a trend. It needs to be taken in the context of several months. Thank you for your thoughts. DN

To: Bruce Brown who wrote (39443)	2/18/2001 5:20:48 PM
From: harmonaronson	Read Replies (1) \| Respond to of 54805

Are we throwing out the baby with the bath water? Many of the more visible tech stocks have been reporting reduced earnings growth. But all of the tech stocks have been taken down indiscriminately. I decided to compare the forward PE vs. growth rate and calculate the PEG (PE to growth rate ratio) for some of the computer makers (CPQ, HP, DELL, IBM) and compare it to SUNW, which is part of the G+K list. I used Barron's 2/19/01 issue for the trailing PE and the expected earnings for '01 and '02 to calculate the forward PE and the average expected growth rate for the next two years. SUNW has the highest expected growth rate and the lowest PEG. Compaq is a close second with a low PEG. Stock Forward PE Avg. Growth rate PEG CPQ 19.9 19.7% 1.01 DELL 26.8 18.5% 1.45 HP 21 5.3% 3.96 IBM 23.2 13.2% 1.75 SUNW 28.2 29.1% 0.97 Any time that you can buy a stock growing at close to 30% for a PEG of 1, that is truly a bargain. If I didn't have so much SUNW in my portfolio, I would buy more. It would be interesting to see if any of the other G+K stocks are likewise at bargain prices compared to lesser companies in the same field. Harmon