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Non-Tech : Charles Schwab (SCH) -- A tech-stock profile? -- Ignore unavailable to you. Want to Upgrade?

To: Michael Young who wrote (648)	6/5/1999 10:09:00 AM
From: Tommaso	Read Replies (1) \| Respond to of 1390

"A P/E over three times the estimated long term growth rate is more than a little excessive. I agree the stock deserves a premium multiple over the brokerage group. But not this extreme." Yes. The stock reached the levels that it has begun to decline from through a combination of speculative buying and repeated short squeezes--gambling in both directions. Very few people make money selling stocks short, because the risk is unlimited and the profit is limited. Buying put options is quite different, because the risk is limited to the price of the option, while the profit can be quite high, if you are correct. Anyone who would be willing to hold Schwab stock for ten years or so, and who can continue to hold it even if it should drop as low as $25 a share, might do fairly well in the end. Too many of those holding it at the present levels may either be squeezed out by margin calls or else will panic and dump it at some lower level. Schwab's low price for the last 52 weeks was something like $18.50. At $37.00, that would be a 100% gain. Many true investors in the past have been delighted to have a 100% gain in a four-year holding period.