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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: GO*QCOM who wrote (117709)	4/30/2002 5:31:56 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 152472

PEG has nothing to do with PSR! sorry, man. Do you know how to calculate PEG? (price to trailing 4 quarter earnings ratio) btw, PEG does not mean "price to trailing 4 quarters earnings ratio". that is called the TTM PE ratio (TTM means "trailing 12 months"). PEG is the PE/growth ratio. it is a product of bubbleonian thinking, because one of the variables (future earnings growth) is not a fact, but rather analyst estimates, which are notoriously inaccurate. therefore, PEG is more of a speculative, back-of-the-napkin type ratio. ultimately, it was the only thing bubbleonians could use to excuse the obscene prices they paid for certain stocks (after all, who wants to pay 2000 times earnings for Juniper, better to say it has earnings growth of 500% [making the PEG 2000/500 = 4!] so that the stock looks "cheap" until the growth stops). the PEG was great for bubbleonians cuz you could reduce a three- or four-digit PE to a single digit PEG. didn't seem as scary! the main problem was that 500% growth, or 50% growth, doesn't last long enough for PE to get back down from the stratosphere. so ultimately, the forgotten variable (price) had to be lowered when earnings growth fell. so the PEG ratio cost a lot of people a lot of money these past few years. in QCOM's case, earnings have not been growing these past few years (despite analyst estimates that they would grow), so efforts to use the PEG would have been flawed. please do not confuse PSR with PEG.