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Technology Stocks : QUANTUM
QNTM 7.050-2.6%Jan 6 3:59 PM EST
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To: SeaViewer who wrote (4897)11/12/1997 8:06:00 PM
From: Rob S.   of 9124
 
Those are nice arguments for why Quantum should be considered differently than it has in the past. Some institutional and other influential investors may even agree with you completely. But when we get into a market spin like this and they go back to the leading valuation reports and models, those figures and reports don't say "Over the past 5 year Quantum has had an average P/E of 10 and an average P/Sales or .52, but now things are different, so ignore the research report we charged you for and only consider valuations looking forward." Unfortunately, that's not how things work. When investors run scarred they often sell until the valuations reach the lower end of historical norms. Investors don't realy know how much Quantum and other companies will be effected by the Asian monetary crisis and inflationary wage pressure. That element of doubt makes them discount future projections for valuations.

Quantum is now at a very fair valuation based on current earnings and looks good going forward. Once the fears subside, which I hope they soon do, the stock should recover nicely. However, Quantum and many other tech stocks could continue to slide down considerably more than the current level. My guess is that we are testing the lows established during the recent crash and will start heading up soon, but I won't be a strong buyer unless it's at firesale prices or it's when an up-trend gets established.
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