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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Dave who wrote (174138)	4/16/2003 9:17:22 PM
From: chomolungma	Read Replies (1) \| Respond to of 186894

Dave: The P/E ratio varies primarily with the economic mood of the investing public. During most of the past hundred years the P/E of the components of the primary stock index ranges between about 12-15%. and During boom times like the 20s and the 90s you typically see high P/E ratios, and in the ugliness that inevitably ensues, you see it overcompensate by dipping below 10%. I don't mean to pick on you, perhaps it was a mental slip, but if you don't know that a P/E ratio is not expressed as a percent, you shouldn't be speaking on the subject. There are more things than just the economic mood that influence P/E ratios. There's inflation and interest rates and growth - both current and potential - then there's the current level of earnings power. You can't compare price to earnings without looking at where you are in the economic cycle. To lump all periods together and arrive at an average P/E is tantamount to saying, "I don't have a clue how to value a stock so this is the best I can do." It's like saying that such and such a team will win 50% of their games next season because over time all teams averaged together win 50% of their games.