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From: jbt@burl.UUCP (jbt)
Newsgroups: net.invest
Subject: Re: Stock market is NOT a present value machine
Message-ID: <1129@burl.UUCP>
Date: Sat, 15-Mar-86 10:39:30 EST
Article-I.D.: burl.1129
Posted: Sat Mar 15 10:39:30 1986
Date-Received: Sat, 15-Mar-86 22:04:12 EST
References: <2023@uwmacc.UUCP>
Reply-To: jbt@burl.UUCP (jbt)
Distribution: net
Organization: AT&T Technologies, Burlington NC
Lines: 25
Summary: 

In article <2023@uwmacc.UUCP> jwp@uwmacc.UUCP (Jeffrey W Percival) writes:
>Someone mentioned that the stock market is just a present value machine.
>This can't be totally true, because then every stock with a given P/E
>ratio would sell at exactly the same price, right?  A quick glance
>at the stock listings shows this not to be the case.  Comments?
>
>-- 
>	Jeff Percival ...!uwvax!uwmacc!jwp

Present value, as I understand it, represents the current value of the 
stream of future payments over time, as in dividends and capital gains from a 
given stock.  A price to earnings ratio is simply a snapshot of a company's
P/E ratio.  This ratio can be historic, current or projected to some time 
in the future, depending on what use is to be made of it.  There seems
to be only an indirect relationship between P/E ratio and the concept of a 
stock (market) as a present value machine.  Comments encouraged!
es----------

<<I speak only for myself and the thoughts(?) are mine--my wife says so>>

Jack B. Turner, Planning Engineer
EMSP Project, AT&T Federal Systems Division
Burlington, NC
Phone - 919/228-4321 (Cornet 291)
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