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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: JD_Canuck who wrote (81457)	3/7/2002 8:58:21 PM
From: Bilow	Respond to of 93625

Hi JD_Canuck; I think that plotting RMBS against the SOX is a good idea, I do it myself. But RMBS has always had more action (percentage wise) than the SOX. Rambus has higher volatility than the SOX. This is for a couple reasons: (1)Analysts either conclude that it's going to be worth billions or it is going to be bankrupt. That's a wider spread than most stocks. You usually see stocks with high P/Es with higher volatility, this is similar to that case. (2) The SOX is an average, while RMBS is a single stock. It's always the case that averages have lower volatility than the stocks they're made up of. (And that's why we use averages.) -- Carl