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

To: Joe NYC who wrote (45607)	1/15/1998 2:17:00 AM
From: Mo Chips	Read Replies (1) \| Respond to of 186894

<<Do you think P/E is just a function of hype? Actually, hype may be a major component of P/E, because hype influences people's opinions about future earnings.>> Hype is another way of expressing expectations. And expectations are another way to express probablility. A PE above the growth rate, assuming expectations are the same for all investors, would then be a function of the yield on a riskless bond (t-bills) factored up for the probability of increased cash-flow to the investor. Another way to state would be that the yeild on the investment you created in your hypothesis would then be equal to the yield on a t-bill plus the 'premium' or expected value of the growth rate. Mo

To: Joe NYC who wrote (45607)	1/15/1998 2:34:00 AM
From: Gary Ng	Read Replies (3) \| Respond to of 186894

Jozef, Re: Now suppose the earnings can change in the future. Ah, now I understand why my investment in INTC is wrong. I should switch to AMD instead. With red P&L most of the time, there is always upward potential which is not a mere percentage increase but from red to black, can I call it explosive growth ? Gary

To: Joe NYC who wrote (45607)	1/15/1998 9:06:00 AM
From: Mary Cluney	Respond to of 186894

Joe, >>>What's your theory? Do you think P/E is just a function of hype? Actually, hype may be a major component of P/E, because hype influences people's opinions about future earnings.<<< Ultimately, it should be all about earnings and what you are willing to pay for it. The complexity comes in to play when it's not entirely based on what has been earned but when it has a lot to do about what will be earned. But, as you have noted, it is also about a lot of other stuff; predicting the future; opinions and the influencing of opinions; and so on. If it were as simple as a PE ratio, then why would you pay more for Motorola's earnings than Intel's or why would you think that Motorola's prospects are that much better than that of Intel's. In our next discussion we will talk about values, hidden agendas, emotions, and much much more. Regards, Mary