Nortel Networks (NT) Message Board

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Technology Stocks : Nortel Networks (NT)

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To: Warren Gates who wrote (7639)	10/25/2000 8:34:29 PM
From: Dave Gore	Read Replies (4) of 14638

Sure, but the real problem is analysts who built in the high valuations in the first place. When you think about it, there is no reason ANY company's stock price should be penalized for ONLY growing revenues by 90% or earnings by 40% going forward. Heck, if any of us gets a pay raise of 5% a year we consider ourselves pretty fortunate. If we get a 7% guaranteed rate of interest for our kid's college fund we are thrilled. We used to think that a company that grew by 10% a quarter was doing phenomenally well. What happened? How did we get to a position that growth of 90% is considered a disaster? Of course, the obvious answer is that SOMEHOW the analysts convinced some people to pay 200 or 1,000+ times earnings, which is crazy. What's worse is that there are stocks selling for over $100 or more that have no earnings and are losing money! It's nuts! How did anyone buy into it? They get a huge run-up and then almost without warning, the little guy comes home from work and is 25% poorer. How about some who came back from a 3 week vacation last year and their dotcom stock with massive losses finally decided to drop by 50% or more? How could ANY analyst give PriceLine.com a target price of 100 last year and expect anybody to not roll over laughing his guts off? But they did and some paid ridiculous prices for PriceLine and many other dot dreams. It's insane and I wouldn't complain so much except that the little guy usually gets in late, buys too high, and sells too late. Somebody has to lose when a stock goes down and it usually isn't the big guys. In fact, he is winning on the way up AND the way down, I bet.

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