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[sharechat] P/Es again

From:	"David Reid" <aspex@ix.net.nz>
Date:	Mon, 18 Sep 2000 21:12:47 +1200

Sorry to harp.

A P/E means nothing as it is only a pouint in time in the value of a share.

Example: A PE of 15 for a share that had a PE of 20 last week is entirely different from one where the PE was 10 last week.

Why the change anyway. Was it due to a change in earnings? Wasit due to a change in share price?

What if the earnings are negative? Is that due to a "glitch" in earnings? Is it one of those "techs" that has potential to earn in 2010?

I earnestly ask you all to look at PSRs for recovery situations.

Look at the PEG (Price earnings growth figure). This is a true measure of whether the earnings of a company are improving over time, since it uses the expected growth in earnings to evaluate whether the PE is good (or otherwise)

David Reid

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