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Technology Stocks : Hewlett-Packard (HPQ) -- Ignore unavailable to you. Want to Upgrade?

To: Oeconomicus who wrote (2325)	11/21/2002 4:18:18 PM
From: MeDroogies	Respond to of 4345

Of course, you can grow earnings if you're cutting costs. But you can't cut costs to 0, either. The sword still cuts both ways. At some point, productivity growth will have to level off. At that point, it will take another revolution in manufacturing/service/communication/transportation to get it moving again.

To: Oeconomicus who wrote (2325)	11/21/2002 4:18:20 PM
From: Dave B	Respond to of 4345

Bob, Though I don't have exact figures, earnings on the S&P 500 have grown by about 7% p.a. since 1934 Even if those numbers are correct, I'll bet that most of that growth came from new companies that were creating and expanding new markets that were added to the index -- not the old-line, "we-can-cut-our-expenses-to-increase-profits" companies that had been there a while. You can really only cut costs for a year or two with any significant impact. It might have been better to have simply jettisoned the money-losing businesses and keep the winners and higher-margin businesses (in HP's case, printers, services, etc.), but since Carly, with the acquisition, has firmly staked their ground in the second camp, even a 7% growth rate for them in earnings is now suspect IMO. Dave