OT..OT RANT
<< Many longs of MRVC are still comparing MRVC to JDSU, JNPR, SCMR, FDRY or SDLI and concluded MRVC is undervalued. Is that a rational reference point? Probably I have to admit that one is not rational if he/she is buying optical networks. That way MRVC is undervalued. >>
Mike, you have nailed something that has bothered me for quite some time. Perhaps I am old school, but I would be less concerned if Chet White were making a case for MRVC based on potential in and of itself, rather than based on comparisons with others in its industry group.
What happens when the whole, crazy, mania over tech stocks, and in particular optical stocks, ends? When valuations go back to so-many times earnings, or PEs compared with growth rates, and all these things collapse? This crap that we are only 15 times sales so we are cheap because so-and-so is already 40 times sales is GOING to end. Only question is when, not if.
And the fact that CISCO buys some outfit out at $7 billion with their funny money does not impress me either. Some day when fund managers regain their sanity (that may take quite a slowing in fund inflows) CISCO is going back to 30 or 40 times earnings.
I have been around long enough to remember the early 70s and the nifty fifty, and what happened to them, the one decision stocks. I remember very well seeing terrific little growth companies selling at 4 and 5 times earnings. I also remember well that at one point in time there was exactly one (1) stock on the entire NYSE that was selling at over 13 times trailing earnings.....Baxter Laboratories. Selling for 14 times earnings. This was probably near the bottom in 1974.
I don't know whether that kind of valuation will return in the next few years or not.
All I know is that it COULD.
What was that saying about history and forgetting and being doomed?
Is it possible to be happy and worried as hell at the same time?
Are my guts still down there where I saw them last?
BP |
