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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Gerald F Bunch who wrote (27926)	5/5/1998 11:13:00 AM
From: Knighty Tin	Respond to of 132070

GB, I think what he says about PE ratios and Price to sales calculations are true, but, his solution is no better. Operating cash flow is also a much less than pure number. For one thing, you have to assume that depreciation is calculated perfectly, and we all know that isn't true. I also think he is wrong about how pe ratios are figured, as nearly every analyst I read or hear is talking about year ahead, two years ahead, or, to justify today's valuations, 5 years ahead ratios. <G> I think it comes down to the fact that no one measure shows you what you need to know to make a valuation calculation. Something like operating cash flow is also a measure of the past and does not show you what tomorrow will bring. Compaq had huge operating cash flow growth right up until they didn't any more. The investor who follows that # found out the truth at the same time as the guy who follows pe ratios and price to sales: too late. I love his degree on his profile, 98.6 if he's lucky. <G> MB