Maybe it was overvalued in December. Obviously a lot of today's price is down to market conditions, but those conditions have been brought about by much over enthusiastic buying and internet hype.
Steve Lee is right AGAIN! I actually have to agree--partially. I may have spent too much time reading the posts of the looneybears, but you have to admit: valuations have separated so completely from fundamentals that it's hard to question any price movements in any direction these days. The share prices of some of these stocks are almost like random numbers. The Buffett-schoolers project growth rates, look at competition, margins, bond yields, dividends, etc., multiply this by that, and come out with some number that represents an approximate "fair value" according to tried and true formulas that help you figure whether a stock is a decent deal or not.
What are valuations now? They are whatever a crazed, wired-up, none-too-bright mob wants them to be...and nothing more. 20 different professors and 100 different analysts and fund managers (who are eating at McDonalds today) have come up with fantasy algorithms rationalizing fantasy valuations for counterfeit companies, some of them even writing best-sellers about them with amusing titles such as "Dow 400,000" that various segments of the public take seriously.
Sun, a great company, is and will remain a leader. I'm skeptical about Win2k and IA64 and competition from commodity servers and so forth (no matter how many Steve Lee installs), and will remain so until the effect of such things starts to show up in Sun's earnings reports, which it certainly hasn't done yet.
It's just that, to some extent, we who lived by hyped-up random numbers are now dying by them. Greenspan did deliberately pop the balloon, but there WAS a balloon.
--QS |
