> Jordan Hayes wrote:
>
> >Yahoo doesn't pay dividends, so why on earth would it be "valid"
> >to "value" it's stock based on a dividend stream? Similarly, since
> >there's no dividends, what do you care about their earnings? They
> >aren't sharing any of their earnings (or losses, for that matter)
> >with you as a shareholder -- so why do you think this is the way
> >to "value" a stock?
>
> From Richard A Brealey and Stewart C Myers, Principles of
> Corporate Finance, Fourth Edition (McGraw-Hill, 1991), p.
> 60. Maybe there's a new edition that's gotten more in touch
> with the New Era. Their use of DEC as a growth stock example
> is pretty sobering.
No joke. IIRC, 1989 was the year their stock went to $200. Within the same year, it was down to $105-108, which my former boss took as a 'buy oportunity'. Then the stock (as the company did) took a long slide into disaster. The stock never saw anything close to $100 again and spent some years in the 30-40 dollar range.
--
Joseph Noonan jfn1 at msc.com
Keep on rockin in the Free World(tm).