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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: limtex who wrote (25897)	5/21/2004 6:06:18 PM
From: Art Bechhoefer	Respond to of 60323

>>With interest rates as high as 2.5%<< You optimist! The Economist magazine (conservative to the core) believes that interest rates will move up to 5%, though the Federal funds rate itself may be considerably less. Even so, it is rare that yield alone would trump capital gains, even with the recent changes giving preferential tax treatment to dividends. A lot of investors believe, or have come to believe that low interest rates are necessary for a strong stock market and that higher interest rates generally reflect higher inflation. Yet historically, during periods of inflation, stocks usually do better than higher yielding, fixed income securities, such as utility company stocks or corporate bonds. The only recent exception to this rule occurred during the 1980's, when interest rates got very high and entered into a long period of decline, setting up very attractive conditions for fixed income securities. A low PE is not in itself very interesting. But a low PE in a company with high earnings growth (regardless of interest rates) is an anomaly and worth looking into as a possible investment opportunity. Since my views are not conventional wisdom, it is not likely that the stocks I favor get very far on the popularity scale, initially, anyway. Art