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  Does anyone else see this?
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nzuz...@gmail.com  
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 More options May 24 2008, 5:10 pm
From: nzuz...@gmail.com
Date: Sat, 24 May 2008 14:10:02 -0700 (PDT)
Local: Sat, May 24 2008 5:10 pm
Subject: Does anyone else see this?
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I'm currently an employee at Costco and have been for about 7 years
now.  Over the past two years I have followed the stock very closely
as I am a finance major.  Costco is a phenominal company that stays
true to its word on how it treats it employees and its prospects for
growth however I am very concerned about the current price of the
stock. I feel it is way overvalued and it set for a further decrease
in the future.  If you look at the PEG ratio (Price to earnings ratio
divded by the average earnings growth over the past five years),
costco is at a value of 2.14 (26.94/12.60).  On a comparable scale
Walmart is trading at 1.40 (17.37/12.40).  From an investment
standpoint most wont invest past a PEG of 1.5-2.0.  Does anyone have
any feelings on this.  I know Nick D has been following this stock
just as much as I have.......

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holybeef2...@yahoo.com  
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 More options May 24 2008, 10:33 pm
From: holybeef2...@yahoo.com
Date: Sat, 24 May 2008 19:33:54 -0700 (PDT)
Local: Sat, May 24 2008 10:33 pm
Subject: Re: Does anyone else see this?
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There are more factors than PEG and such when it comes to investing. I
have explained this in the WMT boards, mathematical equations are only
useful in getting an idea of gains if we live in a reclusive society
with no turbulence or outside factors (no factor in inflation from a
bullish commodity). Also PEG has no footing in a company who executes
innovative strategies such as oversea ventures like how YUM is doing.

Look, it's great to learn, however it's best to realize what is theory
and reality. All sciences, especially social sciences like finance and
economics teaches theory which closely resembles reality, or at the
very least tries to make sense of it.

I'll give you an example, the stoichiometry of an explosion would
suggest that the molecules of a bomb will be evenly distributed
through space, however in reality, we live in a vacuum called gravity
which pulls molecule of different inertia toward the earth at
different rates, thus the idea of an ideal explosion has never been
observed, but the idea would still exist none the less, that's why
it's still taught in school.

Now, revisiting your statements, you say that most won't invest with a
PEG over 2, that may be true, however there are other factors to
consider.


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nzuz...@gmail.com  
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 More options May 26 2008, 10:30 pm
From: nzuz...@gmail.com
Date: Mon, 26 May 2008 19:30:16 -0700 (PDT)
Local: Mon, May 26 2008 10:30 pm
Subject: Re: Does anyone else see this?
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I absolutely agree with you. The manner in which my statement made it
seem like i was only concerned with that factor. Obviously viewing the
financial statements and statement of cash flows as well as other
ratios of financial health is extremely important.  This is not to
mention the overall direction of the company as a whole (we know
costco does pretty darn well in recession like instances). I just
found it interesting that no one really ever speaks of the PEG ratio,
at least from what ive seen. I do still feel as though it is
overvalued in the short term. Do you have any projections of cotcos
price in the short term? Evidence?

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holybeef2...@yahoo.com  
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 More options May 26 2008, 11:11 pm
From: holybeef2...@yahoo.com
Date: Mon, 26 May 2008 20:11:54 -0700 (PDT)
Local: Mon, May 26 2008 11:11 pm
Subject: Re: Does anyone else see this?
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I'm into long term investing, however, as things stand, it's all down
to the crude oil reports, if you want to practice short term pops and
drops.


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