GM Vs CORV / Fiber Optics
Didn't Santayana write about this? FO is the most over-hyped up-on-stilts sector of the market today. Ridiculous valuations, IMHO. Today, you can buy INTC at a P/E of 22.
SCMR? 1,315. FNSR? 1,535. GLW? 148. And how in the world can we value CORV at the same level as GM?
My biggest concern here is that there is such a plethora of start-ups in an industry that has yet to be profitable in aggregate that there is no way in the world that this bubble can be sustained. To put it another way, Wall Street is valuing the FO sector at about $1,000 for every dollar the industry has ever earned! While I agree with Keynes that "markets can remain irrational longer than you can remain solvent," I also think that the world will inevitably and eventually return the FO sector back to some semblance of normal investment interest. If I were to try to identify the one sector of the market that is caught in Tulipmania today, FO is it. :)
That's my story and I'm stickin' to it, Ray
Ray,
There are to things in this world you can't have enough of:
1.$$$$$$$$$
2.Bandwidth
FiberOptics = Bandwidth
GM is old Economy, and until GM begins producing Fuel Cell Cars instead of Earth Choking Internal Combustion Engines nothing will change in GM's Valuation vs Technology.
Bandwidth is a Commodity, and like Oil, the Optic Sheiks will not see a Ceiling on Wealth and Valuation.
Cisco's built it's Valuation on Routers during the first Decade of the Net.
Guess where Fiber Companies are going in the next Decade.
And as the song says "You Ain't Seen Nothing Yet!"
Regards,
JW@KSC |
