Measuring Up ; Plenty of downside left for tech stocks

Over the past 40 years, the 500 stocks comprising the benchmark Standard & Poor's Index have averaged a price-to-earnings ratio of 16.34.

At its core, a PE ratio tells investors how many years it will take for the earnings from the total outstanding shares of a company to equal the current share price. Conventional wisdom says that a stock with a high PE ratio shows that investors believe the company has sound growth opportunities.

Despite the unprecedented crash in technology stock valuations over the past two years, many of the leading software and hardware issues still have plenty of downside ahead compared to their nontechnology brethren.

In the …