Defrocked,
Past ('87) performance is no indication of future ('99) performance, but I have decided not to argue about that any more. However, many are not holding bonds or cash - otherwise the market would not be where it is today.
So yes, the Internet sector is being hit by new supply every day. Fortunately, my index funds have very little Internet exposure. As for earnings growth, some recent books claimed that the risk premium is going down for equities. Which is excellent news, as perviously only a select section of rich people would get compensated for taking risk while the rest were told that risk is bad for them.
As for greed, I suspect that it is not greed itself that investment professionals despise, but rather the proliferation of it among the hoi polloi, which is so uncool! Greed, as the great Ivan Boesky said, is good - but only for the professionals. (Please do not take this personally. I do not mean it that way. Though, I find it quite unfortunate when certain posters continue to refer to their own social class is J6P.)
BTW, P/S and P/B are unrelated to future DCF, AFAIK. And my point was that perhaps the market thinks that the future cash flows are strong enough to justify the high P/E.
-BGR. |
