Dear Ken, I'm very sorry that I upset you.
Of course, one has to be cautious with any stock! I haven't read the article in question so maybe that is why my answer was brief.
I've followed SUNW, EMC, CSCO and ORCL for years. Always, I am nervous about Sun's performance because I recall the days when it wasn't up there! EMC and CSCO are niche players in their areas. One thing that I have noticed about EMC and CSCO over the past year or so is that generally they are fairly stable when the market drops. SUNW has also been very stable over the past year. And Oracle produces good earnings quarter after quarter. It seems like Oracle signs a new contract or brings out a new product every day.
I agree that high PE stocks are risky. Don't buy stocks if you worry continually about their performance. Don't buy stocks if they keep you awake at night. And don't buy stocks if they make your tummy feel queasy.
If I had to put together a portfolio for my mother, I would include CSCO and EMC along with a few biotechs. She doesn't know one stock from another so she wouldn't worry, but I would be accountable to her!! (smile).
[(1) Anyone owning a high P/E stock has good reason to be cautious ... and cautious all the time ... my opinion ...
I am not saying that neither you or I should not own such, but the reality is ... if they slip at all, they will surely get slashed.]
I buy high PE stocks in small quantities until I get to know the companies better. Only when I can tolerate the risk, do I add shares to my portfolio. This strategy has worked very well for me. If the stock drops like a rock, I can dump it without losing my shirt. If it is a winner, then I add additional shares throughout the year.
I have to watch my portfolio daily, and B4 I go on vacation, I sell stocks that make me feel uncomfortable.
[2) In terms of the Wall Street Journal (and its sister publication, Barron's) they are excellent business newspapers for news. ]
I think what my friend meant is that the news is old. The articles are about yesterday and today. The articles are unable to tell you what will happen tomorrow. And, truly, he doesn't believe you'll make money by "reading the WSJ."
Still, even though the news is old, I read newspapers. I prefer The New York Times for general news, and I watch the evening news most nights, unless I fall asleep on the sofa! (gg)
Cheers,
Mephisto
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