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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Mark Brophy who wrote (15757)	11/7/2002 5:32:00 AM
From: Bob Rudd	Read Replies (2) \| Respond to of 78666

<<Does anyone have an opinion on what the appropriate P/E to pay for a stable mature company in a low interest rate environment?>>That depends on several factors: Debt level - pay less for high debt; Quality of the 'E' - EPS similar to Free cash flow is worth more than that from a serial restructurer with a string of 'non-recurring' charges excluded from earnings and negative FCF. Growth prospects & assets are other factors that can affect the multiple investors place on earnings. <<How can I find out the average P/E of the S&P 500?>> stockselector.com But note that S&P has switched to more conservative 'core earnings' that adjust for a number of factors like pension estimates from fantasyland and serial restructurings, so historical comparisons will be distorted until there's a history for higher quality core earnings. <<When is the right time to sell into this rally? >>Dec 4th @ 1:34 PM ET ;)

To: Mark Brophy who wrote (15757)	11/7/2002 9:36:34 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78666

Mark Brophy: "Does anyone have an opinion on what the appropriate P/E to pay for a stable mature company in a low interest rate environment?" Sure. 16.6 max.* "When is the right time to sell into this rally?" Well, right now it looks like it was yesterday. (-gg-) Paul Senior who agrees with Bob Rudd's comments here. (And ROE important factor too, imo). *In absence of further specifics, let GE be your p/e guide. Why pay more?