twister:
You ask:
> , how do you TWIST an EXACT quote?
By not stating the full context in which it was said!
Allow me to say this, yes SUNW in my view at this time is extremely overvalued. But then again so is Microsoft, Lucent, Cisco, Intel, Amazon, Yahoo, and ...,...,...,! The point is 2-3 years ago Sun was not being classified as one of the blue chip tech stocks as Microsoft, HP, Cisco, Intel, Dell,..., etc.. And if it is ridiculously expensive now it is because of the very nature of now being part of the "members only club" of blue chip stocks!
And I can assure you it will get even more expensive and even more overvalued as days, months and years go by! Afterall it is now viewed as a high tech blue chip stock. And yes like any other stock it will face a bump once in a while, but that bump is simply a very short lived temporary stop to the growth of its overvaluaton, and one should take advantage of the opportunity and buy if he/she wants to have a high quality blue chip stock in his/her portfolio.
As for why the "members only club" of high tech blue chip stocks are so ridiculously overvalued, well it all boils down to 2 things: First overvaluation is a relative term! What I and you view as to be overvalued is viewed as undervalued by someone else. In a liquidity driven market like the one we are having now perception is what drives the stock prices. At this time liquidity and the euphoric perception (which is justified to some extend) is allowing the overvaluation of the members only club stocks to take place. When - and if this perception changes and liquidity dies you can be assured everything will tumble to what is viewed as the fair value of stocks. But till then members only club stocks will fly like eagles in the sky! Second of all some of this overvaluation is justified if you look at 4-5 years down the road at which time today's valuations will be ridiculously undervalued! It is just that now everyone wants to enjoy tomorrow rather than today!
Best Regards,
- Addi |
