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To: John Dally who wrote (666)	4/1/2001 9:09:23 AM
From: Arik T.G.	Read Replies (1) of 686

Hello, John. >>Everything we thought would happen is now happening very rapidly . . . I am surprised by the resilience of old economy stocks, as though the ominous recession will be contained within the telecom and semi sectors alone. Last week we had an earnings warning from IP. That's no techy -g-. At current prices I think that the NYSE giants are valued at least as richly as NDX big techs. 1. The upside for telecom related four lettered stocks (i.e. CSCO, JNPR, QCOM) is IMO still greater then any old economy one or two lettered giant (i.e. CL,KO,G) 2. The flip side of the coin - In case of big depression the risk is greater for companies with big financial leverage in their balance sheet. Those are certainly not MSFT and CSCO. Of course this does not mean I approve of P/E of 30+ for the above mentioned techs, but rather that I feel that a P/E of 25+ for the old economy giants is at least equally rich. As both sides' earnings estimates are still calculated under some pretty optimistic assumptions. For 4 years now stocks have been valued under the best case scenario. This still hasn't changed much, only the best case scenario in itself is now weaker then before. ATG

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