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To: GVTucker who wrote (67356)	3/13/2005 4:17:01 PM
From: Dave	Read Replies (1) \| Respond to of 77400

GVTucker, All I know is that investing in high PE stocks has underperformed low PE stocks over time. I believe that David Dreman, also, maintains that thesis, i.e. that the future returns of low P/E ratio stocks are higher than the future returns of high P/E ratio stocks. Howevever, what the P/E ratio fails to "take into account", in a way, is a company's Return on Capital and Capital Reinvestment requirements (Capex). Dave

To: GVTucker who wrote (67356)	3/13/2005 5:34:29 PM
From: Lizzie Tudor	Read Replies (3) \| Respond to of 77400

you know, there is nothing scientific about this, but I think the high PE underperform thesis falls apart within a growth sector. For example, if you took microsoft in the 80s (lets leave off the 90s for now), it was always, always a very expensive stock, that continued to outperform. Same with most "gorillas" as they used to be called. If you invested in value within a growth sector you significantly underperformed. But this is only within growth.