Doc, I really don't like Yahoo reporting tomorrow. Yahoo by all measure is still VERY expensive. Now with the new price (as in PE) conscientious sentiment ruling the market, YHOO may drop big despite their beating earning. This at first hand may set a bad precedent for the entire earning season for the techs and the techs may again sell off. However, clearer heads should prevail soon as thes see that the big kingpins like CSCO, EMC, ORCL and SUNW have not been touched yet. If these mega techs can hold up and support their valuation, the smaller, more high growth techs trading at PE's below the CSCO's of the world should begin to attract confidence.
Say, if TXCC is trading at half the PE of CSCO, would you buy TXCC or CSCO. I think clearer heads would choose TXCC over CSCO once they see the growth potential going forward. The question then becomes, when will this happen? For LT investors, this is not a problem. For ST investors, this is a big headache. |
