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I guess this partially an observation and partially a question. Since a large part of the Earnings Euphoria Ratio is based on tangible book value, it would seem that a majority of big name technology companies (AAPL, MSFT, CSCO, ADSK, GOOG, etc...) would have a large euphoria ratio since most of these companies have relatively high P/B ratios and a decent amount of goodwill.

Technology companies don't typically have the assets that a Wal-Mart or Home Depot do. To compensate, they typically produce signficantly higher margins than traditional retail stores.

Has anybody else noticed this?
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No. of Recommendations: 5
I agree. With many tech companies you get little in the way of net assets but lots of potential growth. With the smokestack "heavies," as Peter Lynch called the industrial companies, you get lots of assets but modest growth.

Then you get the auto companies...little assets and little growth. As Henny Youngman might say, Take my car company, please!"


more from Youngman...

My other brother-in-law died. He was a karate expert, then joined the army. The first time he saluted, he killed himself.

My grandmother is over eighty and still doesn't need glasses. Drinks right out of the bottle.

Some people ask the secret of our long marriage. We take time to go to a restaurant two times a week. A little candlelight, dinner, soft music and dancing. She goes Tuesdays, I go Fridays.
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I guess it should have been common sense, but I didn't think about it too much when I first learned about earnings euphoria. I had been looking into ADSK at the time (around $33/share), and I ended up not buying it because of the high earnings euphoria.

Oops :P
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