<Nasdaq 100's market capitalization is embedded in six stocks (MSFT, INTC, CSCO, ORCL, DELL, AMGN).> I believe that NASD tech companies even for the strongest and the best will be dropping in acceptable P/Es as this tech depression develops(and i said,in January i believe,that the tech sector will be falling into a depression that will drag the whole economy into a full blown recession).
I consider even at this point in time,CSCO can not maintain a P/E of greater than 40-1,it's P/E based on it's present estimated earnings over the next to quarters would place it roughly at a P/E of 110-1.
So all those people who are saying now is the time to buy CSCO,i believe are leading people into a trap.
I feel CSCO has the potential to be an 8 dollar stock.
One of the main factors people have not factored in that all these companies during their rise and fall have been continuously diluting shareholder value at the expense of the public but for the good of themselves via option benefits.As a result these companies,as fast as they grew were printing shares as fast as they could,so now they are just awash in a sea of TOO MANY shares outstanding.
Bill Fleckenstein 3 years ago predicted that this diluting process in time will implode these stocks at the expense of the public shareholders.
He was dead-on correct.
So that is is one of the 6.
Enough for now.
Now my 1000 is for COMPX.
Is it not possible for NDX100 and COMPX to close the gap between themselves? I need run a chart on that.
But let's say the NDX100 reached a point where it would only tolerate a 25-1 P/E(as techs fall out of favor and people realize the old growth rates are a thing of the past)
I need gather data here,on what the P/E now for NDX100 and COMPX be,and that based on earnings by end of 2001,to see where we stand right now.
As i believe if what i perceive materializes,the tech stocks could collapse to as much as 20-1 sustainable,if the psychology of public sentiment shifts.
Greenspan himself states that the shift from optimism to pessimism is a huge force in the market place,and it takes time for that psychology to rotate.
Incredibly,we remain in a OPTIMISTIC cycle.
A question though,to you Londo,you say the market cap of those 6 need drop to zero(yikes) to bring forth a NDX100 value of 1000,does that number require that the others maintain their present market cap or is it based regardless on what the others do?
If so,it reveals,how bizarre market weighting be,and many people would be going broke anyway,regardless of the index reading.
Imagine how much people have lost in RTHMQ.OB,NPNTQ.OB and COVD.OB,but those losses are no longer calculated into the COMPX,as they are now conveniently delisted.
I have little doubt that most of all the people that were averaging down on those,are now annihilated financially(point being,averaging down in in a dying market will ruin one).Paxmax |
