Bob,
Your post is very interesting. SUNW is on my list of core holdings in the tech sector, along with EMC (at the top of my list), ORCL, and TXN. My speculating buy list include: CREE, API (former PEB), AFFX, YHOO, and BEAS. MSFT and INTC are on my overvalued list (hey, they are DOW components). CSCO and JDSU are on my avoid-list because I believe that they will underperform the market in the near- to mid-term.
The market is getting crasier on a daily basis.:) Now, to be serious, I think the best strategy is to begin accumulation in the next leg down. And average down until NAZ to 1000, if it ever goes there. I will keep at least 15% cash in hand...
So DELL is a value play now. How funny! The issue, my previous #1 holding in 1997 spotted a 'hefty' trailing P/E of 25 on the day the market hit bottom (lots of short sellers screamed that DELL was way overvalued at that time). Sept 97? Cannot remember the date. At that time, DELL was growing top and bottom line numbers at a 55-70% annual rate. However, our dear Michael has missed 5-6 quarters in the last 2 1/2 years and basically shown no growth (or negative bottom line growth during that period of time), and still trades at a P/E of 31 as of today. And you call this a bear market valuation? So what's the fuss of valuation on this market? Sure the market is much cheaper as compared with that of blown off top. However, do you really believe that the market in general is cheap? Well, valuations are in the eyes of the beholders. Some investors(on this board) screamed that CSCO was a steal at 70!
Random musing: The Fed and Wall Street are betting that a torrid consumer spending should help the US economy avoid the recession. However, consumer saving rate right now is a nice -1.8% as compared with close to +10% in early 1990s. How low this number can go? It looks like a very nice and serious bubble to me.
BTW, it's not easy to be bearish in this ridiculous bull market. And it's even tougher to be bearish for 8 consecutive months when market gods and goddess (AFC etc) have been screaming buy and pounding tables like there is no tomorrow. ... And what can be more difficult for a former bull and momentum trader to realize that the bull market has gone too far and it has to crash, and crash hard? Trust me, it's not easy to resist the temptation to buy CSCO at 50 and average down until...because it has been proven year in and year out that buying dip is the most efficient way to make $$ in THIS bull market.
When Greenspan first screamed out 'irrational exeburence' toward the market, DOW was sitting at a little over 6k, and NAZ at 1200.
larry! |
