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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Randy Ellingson who wrote (33117)	1/7/1999 1:16:00 AM
From: Don Westermeyer	Read Replies (2) \| Respond to of 164684

Actually I meant to say 1997, not 1995 for that earnings remark, and that is really only for the chip companies. My mistake. Most of the tech stocks have about the same earnings than 1995 and even a poorer intermediate earnings growth outlook. I took the quote from an article on semiconductor 'chip' stocks. I don't know how accurate it is. The article made a point of INTC. For example INTC made $3.88 in 1997. This year they are expected to make $4.33, about 15% more. That's roughly 7%/year and that isn't really likely to do better than that going forward considering the margins on chips are in decline. The stock price has appreciated from about $75 to near $130 now (about 70%). Last year at this time you practically couldn't give the stock away. The article also said that over the bull market, earnings for the S&P have risen 300% while stocks have climbed 1200% (probably more by now). I'm not sure if one can call the 4X multiplier due to easy credit or low inflation. A lot of people call the current market a 'credit' bubble. So in short I agree with you, companies have substantially increased their earnings, but most of the 'wealth' has not come from the earnings. Like you said, P/E expansion. :)