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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Baldur Fjvlnisson who wrote (12673)	1/3/2002 1:56:50 PM
From: David Howe	Read Replies (1) \| Respond to of 74559

<< Are these P/E ratios supposed to be bargains? >> No, but they are reasonable. Take MSFT for example. Factor in the fact that it has the strongest balance sheet in the world with over $36 billion in cash and short term investments. Take that cash out of the market cap and look at forward EPS of $1.90 or higher and you end up with a PE of only 30. That's not bad for the strongest company in the world that has significant growth ahead of it and has proven to be recession resistant (growing revenue even during this technology depression we are currently in). What will MSFT do when the economy recovers? I suggest that you not short it. IMO, Dave