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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Mike Ankley who wrote (42072)	3/15/2001 6:31:38 PM
From: Prognosticator	Read Replies (1) \| Respond to of 64865

Japan has had zero and negative growth for almost 15 years, and came out of an asset bubble that makes the recent dotcom bubble look pathetic by comparison. Earnings there are so abysmal that P/E ratios are meaningless (1/(any small number) is a (large meaningless number)). Investor sentiment there is terrible, and stocks are in the toilet. The analysis I gave is the simplest I can come up with that relates earnings returned by investing in a company to the return you would get by sticking your money into a money-market account. That's where the reciprocal relationship comes in between interest rates and P/E ratios which is why, under normal circumstances, an interest rate cut gives a boost to stock prices. You know that at times like these it's the P part of P/E which is driven through the floor by investor sentiment. I'm not trying to say that SUNW's P/E ratio will stay at 30, it will rise and fall with investor sentiment due to the P component. Merely that I feel that SUNW is fairly valued for todays conditions, and that is why I am buying the stock. So what's your theory about P/E ratios then, since you don't like the one I tried to outline? P.