Summer may be deal-making time, which may drive the market.
I don't put a lot of stock in rumors but there seems to be increasing liklihood of takeovers, mergers and IPO's which may shake up, drive and excite the market, and not just tech but energy and other sectors.
LU-ALA - so far LU stock has stayed around the low end of its recent range despite definite takeover talk news. This is baffling to me as why would LU sell for anywhere around this low price? And why not a bidding war? LU is cheap at this price when you factor in a billion shares of Agere and the largest patents library in the world. I may load up on cheap LU shares Tuesday. I don't see a downside there. There is no way management coild approve a merger or takeover which doesn't help share price. Afterall they have a very big vested interest themselves.
Rumor central - DELL taking UIS out? IBM or SNE taking out PALM? LOR, ELNK, NOVL, UCL, YHOO? TYC or NOK getting into bidding for LU? Just the beginning.
Staying mostly cash now but waiting for opportunities.
While some say earnings worries will dampen prices now, look at the stocks which have had poorest earnings and see they are already lagging down near their lows. I'll be bullish on any sharp dips in select stocks. Greenspan is still on the bull's side and any damage to the downside will be limited and a buying opportunity. Holding several oil stocks as hedges and like their chances of going back up after last week's fade-out. Considering the bango earnings they'll be having for many quarters to come with gas at record prices it's laughable stocks like P and UCL are trading around 8-10 PE.
On the subject of high tech PE's look at the market caps instead of the PE's right now. Subtract cash, debt and look at cashflow and other assets like real estate, brand names, strategic positions. It may be confusing but market inefficiency provides bargains, as well as over-pricing. |
