These Favorites are solid, well-run companies which have a good future, but they also have stock prices pushed by what might be described as overenthusiastic investor expectations. The Favorite Six are Microsoft, Intel, Cisco, Schering Plough, Coke and Pfizer. Fiduciary has measured their popularity by calculating what their market capitalization is. Market capitalization is the total dollars spent to buy all the shares, i.e., share price times number of shares. That's a lot of money.
Investors think so for the moment.
These companies have price-earnings ratios two and three and more times above what traditionally has been considered a healthy level. Fiduciary found a way to give it a perspective. If they're not, they must be living not on earnings production but on earnings expectation. Or perhaps on irrational exuberance. All Rights Reserved.