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Strategies & Market Trends : Don't Drink the Kool-Aid Kids

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To: Stoctrash who wrote (610)	5/14/2001 8:39:07 AM
From: John Pitera	Read Replies (1) of 1063

Doug Kass fund manager on --- Fred Hickey on Intel 5/10/01 7:02 AM ET I mentioned Fred Hickey's New Hampshire-based monthly newsletter, THE HIGH-TECH STRATEGIST, as a must read two weeks ago. To get a picture of technology's DARK SIDE, run don't walk to subscribe to Fred's product. Just received his May 4th piece ("The Bust Is Yet To Come") which starts with two tables. Fred makes the case, graphically, of a disconnect between investors' perceptions (a rising PE multiple)against the backdrop of Intel's slowing sales growth. The first table depicts the sharp deceleration in the rate of sales growth at Intel from nearly 50% in 1993, down to 20% by 1997, and now, negative this year. The second table shows a corresponding RISE in Intel's PE Ratio over the same interval. Back in 1993, Intel's PE Ratio was about 10x, the PE doubled by 1997 to 20x, and, this year it is almost 50x. Intel's shares were conspicuously weak yesterday. Fred's report might have been partially responsible - as his star is on the rise.

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