Tony, RE: I guess what I'm asking is what do you expect to come crashing down? And, maybe Intel gets back in favor?
You have named all the usual suspects in the absurdly valued league, although there is also an Internet-type aspect to the valuation of the infrastructure companies also. Cisco, EMC, et. al. aren't going away, certainly, but I wouldn't be surprised to see them both correct 50% or more.
Just because the long term fundamentals of an industry are excellent doesn't mean that the long term decision must be 'buy the stock'. In thew 50's, the electric utility industry was just as much the darling of Wall St. as the 'Net is now, believe it or not. PE's for regular old utilities was in the 50's, absurd for the times. People who bought into that craze in the last couple of years still haven't outperformed T-Bills. People who bought Go-go stocks in the Go-go years (i.e. IBM, XRX, AVP) have underperformed the market badly, and at best barely did better than T-bills. People who bought oil service stocks in the late 70's and early 80's also would have been better off in T-Bills.
As far as Intel is concerned, you never can guess when sentiment will shift, you can only structure your portfolio to take advantage when the shift happens. I am just hoping some kind of externality happens a la the Pentium scare that would allow Intel to get back into a comfortable valuation for me. |
