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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: slacker711 who wrote (36118)12/7/2000 2:25:39 PM
From: Bruce Brown  Read Replies (1) of 54805
 
Slacker,

None of us are here to give specific investment advice. You can imagine the amount of losses that people have sustained on a stock that has gone from $250 to $30 whatever it is at the moment. On top of the tax loss selling, there are the numerous analyst downgrades (Oh yes, the same analysts who felt it was strong but at $100 to $250). In spite of all of that, one must apply traditional valuation metrics to any company and see if 'value' is determined or not determined for the longer haul. It doesn't matter if we are talking technology stock, Godzilla stock, non technology stock or whatever - at some point you have to say as an investor "I see value." We can easily look back at this point in time and say "Qualcomm certainly represented value at $51 a share this past summer." Some interesting technology stocks certainly appear to possibly represent some historical 'value' at the moment. Intel has a P/E of 18 at the moment. Yahoo! has a P/E of 73 at the moment (about the same as Sun Microsystems even thought the growth rate for Yahoo! is higher than Sun). The question is the growth rate for both in a slowing economic environment. When the growth is in question, very few want to buy. Yet, knowing Yahoo!'s growth rate and estimates for the next 12 months, I would only venture to say that at $33 a share more value is represented than when it was selling at $68 or $120 or $140. That's not to say it might be selling at $29 by next week. Who knows? However, the Internutz mania has now been removed from the stigma of the equity and we can actually use traditional valuation metrics to take a look at the company.

BB
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