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Technology Stocks : Nortel Networks (NT)
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To: telecomguy who wrote (4851)2/20/2000 2:35:00 PM
From: sam  Read Replies (1) of 14638
 
People buy stocks because they think the share price is gonna rise. It's that simple. And what makes share prices rise? In short, in today's market environment, its all about the future. Even going out as long as four years (even thought that itself seems quite problematic). The Street tends to favor projected revenue growth and margin expansion. It also rewards those winning market share in their sectors. Anyone talking this year's price to earnings is talking irrelevancies. "This year" is primarily important on judging trends: in growing of revenues, in expanding margins and in winning market share. Is the company in question growing according to plan? Are they keeping the street "up to speed?" Are they exceeding expectations? In this low inflation, post-cold war environment, those are the companies that tend to be most favored by investors. Indeed, fund managers are falling all over themselves to jump into the "right" names. Twenty years ago there were no companies with market caps even approaching 100 billion. Soon, we will likely have several approaching one trillion dollars. Twenty years ago the thought of a trillion dollar market cap was absurd. But times change I guess. For better or worse. So may the matrix with which we value companies. When will we know the matrix has changed? The market will tell us. It always does.
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