Sometimes I get to thinking and I just cant help myself. I keep seeing a lot of people, some of them that I respect a lot, saying what great deals stocks like JDSU, QCOM, NTAP, ORCL (I agree on this one, I own it..pray for me) SUNW (again pray for me), CHKP, YHOO, CSCO, INTC, CIEN and all the other old leaders are down here.
The first thing I think its important to remember is that the old bull market is as dead as my great grandmother who died 20 years ago. It aint coming back. We need a new bull market, and a new bull market will be built on the back of NEW LEADERS!! not OLD DEAD DOGS!!! Every bull market has started with NEW STOCKS. This one was built on the likes of SUNW, CIEN, CSCO, INTC, DELL, MSFT etc...we need new stocks now that none of us have ever heard of (or most of us anyway)
Im not much of a funnymental guy, but I do know that sometimes they matter, and when they do they really do.
ORCL has a PR of 13, im willing to take a bet there, MU has a PE of 17, again Ill take a small bet, SUNW 23...a bit high as 20 has usually been seen as a high PE for a growth stock in the past...but what the hell.
But look at some of these other darlings. QCOM is 350ish, SEBL is 130ish, YHOO is 140ish, CIEN is 80ish..still high. Some of the darlings like CMGI are going to get delisted if they dont get their acts together soon. So what about CSCO @ 33 which seems low compared to were its been. Well, it does, but again its pretty high using history as a guide. Also, most of CSCOs growth has been coming from buying companies and using its stock as the currency. Who the hell wants that stock right now? I thought about INTC with its PE of 16ish, low enough...but I think they are going to have trouble too. A lot of their growth has come from investment (and we all know how well those are doing) and also their new Chips suck compared to the new AMD chips..so 16ish might be rich for them.
Remember all the guys who watched CPQ ALL THE TIME!! Every time it rallied they proclaimed its return to the glory days. EVERY SINGLE TIME!!!! Or the true believers in IOM..Every stinkin time it rallies they thought...bottom. Or the Compaq guys..gotta watch CPQ..its cleared this or its cleared that...well thats nice..but those stocks have had their day in the sun and they aint coming back to their days of past glory. The new leaders took over from them. Well, thats whats going to happen to our beloveds CSCO, INTC, NTAP, PMCS, DCLK, VRTS, SEBL, QCOM, CIEN etc...maybe even to my MU, SUNW and ORCL....WE NEED NEW LEADERS OR WE AINT GETTIN OUR BULL BACK!!! Its that simple. Things are not different this time.
Ned Davis has an interesting bit of reseach which was released a few weeks ago. No bear market has ever ended until consumer debt came to new low levels. We Americans still love our SUVs and Credit Cards..our debt is at all time highs. One other thing, if you took the Nasdaq100 and gave it a PE of 20..it would be @1100.
Brandon |
