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To: Gordo who wrote (139)	6/23/1998 10:27:00 PM
From: Scott Mc	Read Replies (1) \| Respond to of 512

Gordo, thanks for the input, yes I do focus a lot on P/Sr and there are a few reasons... 1. Tech stocks are much easier to value 2. Much harder to fiddle with revenue nbrs, where as earnings are very easy to play with. 3. Much impressed with a book by Ken Fisher(son of Phil Fisher) who writes for Forbes(Superstocks)pub 1984, goes into much detail on P/Sr 4.If you read O'Shaunessy who back tested the US Mkt using S&P data and published his landmark book "What Works on Wall Street" you will find that P/Sr is a more consistent indicator than any other. That being said, I still focus on earnings first, however when a company is losing money,Sales are an easy way to quickly value it in relation to others in the same industry. Also I feel it gives me an idea of potential earnings. Scott

To: Gordo who wrote (139)	6/24/1998 7:49:00 AM
From: Ally	Read Replies (1) \| Respond to of 512

Hello Gordo, >>I am also curious about your fascination with price/sales ratios. I personally prefer price/cash flow or even price/earnings over price/sales. Show me a good company that is able to put dollars on the bottom line and I'll take it any day over a company with all the sales in the world that is bleeding red ink. Just MHO. Anyone else have thoughts on this topic?<< Different ratios tell different stories. P/S is top line valuation indicator and speaks about reasonableness of price in relation to sales. P/CF is more useful than P/E in that the non-cash items are not thrown in to clutter the pure value, which is, the amount of cash generated by the business. P/E is the real bottom line, and includes everything (depreciation, special charges, taxes). All of them are useful and have to used in context of what they're intended to show. Low PE alone may not be a desirable indicator. The company could be lacking of business growth and keeping too close to its knitting. Growth, is the key for me. Find me a company with excellent growth and many a times, it would turn out also to be profitable. Any others' thoughts on the topic?