>> The U.S. economy, or at least the high tech and manufacturing part of it, is heading for a recession.
If you said that Malaysia is headed for a recession, I would find it plausible since it's an independent economic entity, but tech is not an isolated sector. Cell phones are used for business calls by MO's sales people, the accounting department at Alcoa uses computers, and Nike, as has been well publicized, uses business planning software. There are ICs in autos, depth finders on boats, and radar on planes. The point I'm making is that I don't think tech can have a recession unless everything has a recession.
>> Some of the Gorillas (only some) are getting to where the PE is reasonable, and you aren't paying for earnings a decade away, and you aren't assuming EPS growth rates of 100-300%.
Thanks for your studied opinion. It would be a big help if you could help define "reasonable", as we've been searching for a metric. But doesn't it seem strange to you that KO, which grows about 3% YoY, commands the same p/e ratio as CSCO, which grows over 50%?
If I were to offer a guess, I'd venture that, as a result of a massive sector rotation, tech is currently very undervalued, and the bubble is in the "defensive" stocks.
uf |
