MG, Re: Tick - Tock
Okay, let me get your head out of a weekly charts and into a monthly chart. Draw some trend lines on IBM.com. This quarter the earnings are projected at 17%, next quarter 13%, this year 18%, next year 15%, and 5 year projected growth rate 12%. PE is about 39.
I show it sitting 21% above the monthly trend line. The five year average PE is 20. Now, I really believe that IBM will benefit from the future expansion of the internet. However, I really have a problem with both the technical and fundamental attributes of this puppy. Maybe I'm naive, but I have a hard time understanding how these valuations will be maintained. I got to believe that JH is going to make mucho denero on his poots.
USPIX is one of the ProFunds. I got it targeted, rather than URPIX, as I don't buy into the "small caps will shine" theory. We have witnessed over and over that this is a liquidity driven markets. When the rush to exits occurs, the little puppies get absolutely obliterated. Hell, many of them have not recovered from the the 1996 sell-off.
I really like Captain Jim's concept of securing a portion of USPIX now and offsetting it with QQQ. Seems that a 1/3 USPIX position and a 2/3's QQQ position would maintain a slightly bullish position, with the ability to close the QQQ position with the intra-day ticks and tocks. At this point, I'm just thinking out loud and welcome opinions.
I'm updating a lot of the data on the Big Boyz and hope to post more on this issue later this weekend. Boy is it time-consuming!
Just a view from the swamp.
TB |
