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.

Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Jerome who wrote (9731)	4/17/2001 5:40:03 PM
From: Math Junkie	Respond to of 10921

The problem I have with disregarding P/Es is that at the peak of the bubble, one of the things that got investors in deep trouble was the notion that earnings don't matter. And one of the important observations in that article was that the stocks that have been hurt the least are the ones with better earnings yield.

To: Jerome who wrote (9731)	4/17/2001 11:48:14 PM
From: Q.	Read Replies (1) \| Respond to of 10921

p/e's can be used successfully with cyclical stocks if you average the denominator over multiple years, to include a full cycle. Hardly anybody bothers to do this, though. Everybody just uses a denominator averaged over exactly 12 months, as if 12 mos. were always the ideal period. Given that it's too inconvenient to average eps over multiple years, and then calculate a p/e, we're better off just looking at PSR and price/book, especially near the bottom of a cycle.