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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: broken_cookie who wrote (46267)	6/18/1998 12:22:00 PM
From: WBendus	Read Replies (1) \| Respond to of 58727

Richard, I would assume that the ratio of the price of oil service stocks to the price of oil being at its highest price ever, suggests that the sector may still be overpriced? It sounds like an interesting statistic, but I sincerely doubt that it has any credible interpretation. With more rigs and more production now, even lower prices on oil can still create value for a company. It may be a very crude analogy (no pun intended), but look at what Wal-Mart has done. If Wal-Mart's stock price was ever put as a ratio to the average price that it charges on the products it sells, and compared to its competitors, the same meaningless interpretation could've been made. The ratio completely ignores the impact of volume of business, and therefore no credible correlation should be construed to exist in my eyes. What firm or analyst reported this ratio? Is it one that really has credibility in the industry?