MGV OT: You make good points, and using P@G as an example of what can happen to supposed safe stocks is good. When I mentioned liking 12% growth at 6 pe, I'll admit it is not my ideal. Overlooked in this market are companies that have been growing at say 25% and have PEs at 15 to 25. I do like growth. I guess the main point is that one should be careful of situations where investors are falling all over themselves to own them at any price because it leaves little room for error. If one has some growth stocks that are solid-well managed but not currently in favor, there are still risks, but also there is ample room for not only growth in earnings, but expansion of PE multiple if they become more in favor.
Philip Morris was picked as the #1 stock to own in 1990 by institutional investors for this past decade. I remember when Waste Management was one of the top growth stocks to own and the PE was very high at the time for the seemingly assured growth. Both have been disasters. Yet, MSFT and CSCO have always been in favor and richly valued, but have continued to perform beyond reasonable expectations.
Tough to generalize, but I'd say the bottom put in by value stocks a few weeks ago when the market was almost assuming new economy-internet-tech., would crush old economy and it priced in that assumption-well that assumption will turn out to be a simplistic exaggeration. Stock prices resulting from that assumption presented a special opportunity to buy quality at very cheap prices. What gives with a market that values American Express at $170 one month, then $121 the next. Getting emotional and wild-no news there and no complaints as one can take advantage, but it is so compressed in time now that one has to be pretty quick and decisive. Have a good weekend all, Mike |
