03-24-2006, 01:37 PM
> Interesting. I just ran the numbers on a spreadsheet and it works.
> Is that some kind of stockbroker rule-of-thumb that somebody noticed?
An old economist friend of mine used the P/E as a quick-and-dirty metric for expected growth. There are better ones, but this is a good first approximation.
For example. Google closed yesterday with a P/E of 68. It'd take about seven years of 68% growth to pay that back. I'm fairly certain they can't pull that off for seven years. But, I could be wrong.
> although it has to stop somewhere unless they
> continue bringing in paradigm-changing technological hits
How many iPod-like products do you think APPL can pull out of their hats? And how long can they claim 70% of that market? How big a profit margin can they maintain when they produce Intel desktops?
All stock transactions on the market are made between someone betting the stock will go up and someone betting it will go down. The answer to the above questions will affect whether you should have bought or sold.
If we could see into the future, this would be easy :-)
> Is that some kind of stockbroker rule-of-thumb that somebody noticed?
An old economist friend of mine used the P/E as a quick-and-dirty metric for expected growth. There are better ones, but this is a good first approximation.
For example. Google closed yesterday with a P/E of 68. It'd take about seven years of 68% growth to pay that back. I'm fairly certain they can't pull that off for seven years. But, I could be wrong.
> although it has to stop somewhere unless they
> continue bringing in paradigm-changing technological hits
How many iPod-like products do you think APPL can pull out of their hats? And how long can they claim 70% of that market? How big a profit margin can they maintain when they produce Intel desktops?
All stock transactions on the market are made between someone betting the stock will go up and someone betting it will go down. The answer to the above questions will affect whether you should have bought or sold.
If we could see into the future, this would be easy :-)