If the answer is downward adjustment of P/E, then I don't see how many of these tech stocks can survive a multiple contraction to what is considered sane levels without some major pain. The level of change is going to feel like being mauled by a polar bear regardless of what the DOW numbers say.
true, however, the correction was indiscriminate and all Teckies good and bad were flushed. Fund Managers continue to sell the "woofs" on rallies and buy the "artificially supressed. This is a rotation within a sector which gives the sector a good cleansing. Stocks like JDS,NT,CSCO, will likely maintain some level of "stupidity" because they truly are the behemoths in their category.
Unquestionably there will be bleeding, but again, you know you are in a "bear market" when you can't make a buck no matter what sector you are in, this does not have the smell of that kind of scenario.
Its interesting to debate the subgroups that will impact the Nas & Dow from week to week, but the history of cyclicals say that you'll be discussing many subsectors throughout one year, so because everyone has been so affixed to Teckies and have watched them sky-rocket, its only natural they equate a bear to their demise.
The end of the sector rotation is appropriately valued Inut/Teckies, where Teckies are not confused with Inuts and Inuts with no hope of existence are not confused with viable Inuts. Where Wireless companies are not flushed with Inuts because people think they are Inuts.
There are "MANY" promising Teckie companies out there that have got flushed to P/E's that do not recognize there upside potential. These are the ones that will dominate, the others will be "also rans".
The interesting thing is, while everyone is concentrating on the Teckies...Oils Pharmas, Real Estate, Transports are moving along very well...does it matter the wondersnot.com lost 92%...not to the rest of the world, it only matters to the person who is about to wall paper his home with wondersnot.com share certificates.
(*Great cloaking device. Say, are you sure this works? *)
(*Absolutely do you think for a minute that I would say something like "the rest of the people on this thread are dorks" unless I KNEW FOR SURE that they couldn't read it?????C'mon the SI Cloaking Device works perfectly all the time!!!*)
the Chief |
