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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: Tim Luke who wrote (26226)	4/11/1999 1:08:00 PM
From: Nazbuster	Read Replies (3) \| Respond to of 90042

I pay far more attention now to the PE of a stock I go long with. How vulnerable are they? Look at PSFT. When they stumbled, the PE killed the longs. It's bad enough missing earnings, but you get hit twice: bad earnings and PE cut in half. Suddenly your stock is 1/4 of its prior price. If Dell can't keep the 86 PE, but lets it slip to 43 (still high), you just lost 50% of your holdings. CPQ at 30 is 1/2 the market cap of Dell, and it's depressed right now. What if CPQ resolves its problems and Dell sees growth flatten out? IBM PE is 28. HWP is 25. GTW is 34. See a pattern? Who's vulnerable? Hell, I might even short Dell at this level! I've convinced myself!