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

To: Dave B who wrote (2934)	6/5/2003 11:54:57 AM
From: Oeconomicus	Read Replies (1) \| Respond to of 4345

Elders? I think my copy of Brealey & Myers is no older than yours - mid vs. early '80s. ;-)

To: Dave B who wrote (2934)	6/5/2003 12:03:25 PM
From: Kirk ©	Respond to of 4345

How about a comment from the peanut gallery? First, I don't have an advanced degree and have felt B School isn't worth much other than the contacts you make while there. Gates sure proved you don't need a B School degree to be successful. Most "good stuff" is self taught at the school of hard knocks. I've sure paid tuition there! OK.. Dell, IBM and HPQ Price/Sales. A high price/sales while delivering large profits means you either have a model that others can exploit (ie competition WILl come after you ... just ask EMC and SUN or PALM and Handspring - all companies HPQ is killing the high profit margins), you have proprietary IP that commands a premium as no work-a-rounds come close (MSFT now losing this to Linux) or you have to run very, very fast to keep ahead of the competition (Dell and Intel). Dell has a high P/S because they don't have an R&D expense similar to that of IBM or HPQ. Their business model is to find high profit margin businesses that do the R&D for then they come in later with their low cost model and steal the crumbs and go for the whole turkey once they get close to the table. Eventually they will get large enough that they can't get the growth scavenging crumbs from the giants. P/S, PE and PEG all tell us stuff. I find them all useful for making comparisons between companies to see which ones I might want to own should I decided to go into a particular business sector with my investment dollars. I have not bought any biotech companies since I don't like any of these valuation metrics for them. It doesn't mean the companies won't be good investments if they have high ratios, just the odds of great returns are better if these are low.