Jay: While it is true the values in the top 100 (mostly techs) are still too high by traditional methods of valuation, I would argue they are in fact greatly undervalued...
As far as top techs are concerned, aside from biotech (for which I plead no special knowledge), most are based on (to a greater or lesser degree) building the worlds largest construction project: the world wide web...
By the "books", the money in the web is still where it has always been: advertising and retail sales. But the little acknowledged indirect spinoff of the web has been dramatic increases in productivity...worldwide. At work, I have access to a virtual world wide listing of products, services, information, etc...ASPs, reduction in paperwork, etc...our companies direct costs and overhead are much reduced...I work at home from time to time...
The world was reaping big rewards for fostering the growth of the US tech (read: web) sector. The "book" payoff was the direct cash flow, but I would argue the biggest payoff was and still is the (indirect) reduction in costs, increase in productivity, the consequential improved standards of living.
(Not to be forgotten is the increase in personal liberty (although one would argue this is a reason for some govs to fear it)).
Therefore, I would argue the "bloom" the tech sector was blessed with was a fair recognition of the increase in world economic value it was creating. It had reasonable value received for substantial value created.
Given this, Greenspans increase in the rate to limit the US tech sector, and his subsequent failure to "floor it" following his (even he recognizes it) mistake is going to leave him looking like the biggest monkey-head in history...financially, politically, or otherwise...
One word: Nerospan
Point is, you have to consider indirect economic benefits too, because the "books, formulas, and theories" are only a crude model of reality...tend to only capture direct relationships...
The mental capacity to see beyond the "books" is called vision.
Forest and trees...(seems engineers are not the only ones with that problem)...
-Own |
