Is Geoff making investing predictions again? My, oh, my. I didn't get my daily listserv digest yet and I'm still crying to catch up on the last month, so I haven't seen the post outside of what was cut and pasted here.
To put Geoff's 'comments' in context, maybe we should take a look at some dominant franchise names in the S&P that are outside of high technology to see where valuation multiples compare to those we follow in technology. I think it is only fair to compare some of the more mature dominant franchise names in the S&P outside of high technology when you stack them up against more mature names like Cisco (P/E 72), EMC (P/E 71), Sun (P/E 42), Microsoft (P/E 32), Intel (P/E 22), Oracle (P/E 22), etc... due to the issue of having to pay a premium in share price for owning the franchise. I'm not interested in looking at how they compare to the 'average' S&P multiple because the franchise premium is a reality both in tech stocks and non tech stocks which we are all well aware.
So, I would look at some dominant franchise names like Halliburton (P/E 104), Pfizer (P/E 76), Enron (P/E 72), Coke (P/E 68), Disney (P/E 56), Schwab (P/E 48), General Electric (P/E 36), Harley Davidson (P/E 40), Home Depot (P/E 40), Wal-Mart (P/E 38), Southwest Airlines (P/E 26), Boeing (P/E 25), Citigroup (P/E 22) and Tyco (P/E 22) from the S&P. Gee - Pfizer, Enron and Halliburton alone carry a higher P/E ratio than all the G&K's I listed above.
It is hard to put Geoff's comments into context without digging deeper into the multiples (PSR, PEG, estimated P/E, relative estimated P/E vs. S&P 500, price to estimated cash flow, etc...) to wonder which equities in gorilla gaming he was talking about and which S&P non techs he had in mind. That's not to say they won't all come down - including the S&P non technology stocks - in an environment of economical conditions such as we are in. You can read the S&P 500 report at Zacks.com to see what some of the analysts are saying about FED, economy and S&P:
my.zacks.com
Next subject.
Although I've been away from the computer for the most part over the past month, I wanted to point out a Multex.com February top picks column from one of our folder members, Alexander Muylle, concerning i2 Technologies. Here's the link:
thetelecommanalyst.com
My apologies if that link had already been posted.
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