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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: rich evans who wrote (4449)	7/22/1998 3:22:00 PM
From: Joe Dancy	Respond to of 78687

More investment articles. Thanks for the comment Rich. ******* There is a school of investment thought which holds that you buy a stock when its earnings growth is higher than its price-earnings ratio and sell it when its earnings growth is lower.If the growth of earnings per share, for instance, is 20 per cent and the share price is 10 times those earnings then the stock is a screaming buy. If the reverse, then sell the stock.It's an appealing idea in its simplicity. It also does not work very well. scmp.com Ladies and gentlemen, start your portfolios -- or retune them. President Clinton this week is expected to sign the IRS Restructuring and Reform Act of 1998. It includes a capital gains cut that sounds technical but matters in Silicon Valley. mercurycenter.com A bull market is all about big numbers. And in the greatest bull market of all time, the numbers have become very, very big. General Electric Co., for example, recently became the first U.S. company to top $300 billion in market value (that is, the company's stock price times the number of its shares outstanding). detnews.com The booming U.S. stock market continued to attract large foreign interest. "Foreign direct investment in the United States and U.S. direct investment abroad continued at near record levels in the first quarter of 1998, spurred by strong merger and acquisition activity across national borders." Private foreign investors bought $29 billion more in U.S. stocks than they sold in the first quarter of the year. That followed record net purchases -- the difference between purchases and sales -- of $66 billion in the year 1997. washingtonpost.com Large-cap stock funds continued to outperform small-cap funds by a wide margin in the quarter ended June 30. The Vanguard S&P 500 Index Fund (large-cap stocks) was up 2.9 percent compared with the Vanguard Small Cap Fund's loss of 5 percent for the quarter. Lower returns of small-caps compared to the S&P 500 index makes a contrarian investor eager to increase investments in small-cap stock funds. According to Kyle Frey, manager of the Warburg Pincus Small Company Value Fund, "Valuations of a growing number of good-quality small companies are compelling." Frey points out that price-to-book, price-to-earnings and price-to-sales ratios of small companies are at the low end of historic averages relative to the S&P 500 stocks. detnews.com