Tech dead for years ? No, just telecom ;-)
Warpfactor's post -
>>>I notice we have two groups of people here. One group seems to think that tech is dead for years, that we'll be able to pick up JDSU and LU at 3 by the time all is said and done. Others (Jim P and KB et al) who are just waiting for the right entry point.<<<
Put me down in the 'Tech is dead' group (yes , it's exagerated, but it's a clear position)
I go for 95% of tech being dead until Spring 2002, and lots of telecom & network infrastructure being dead for a few more years after that.
Financial times has a good article today & yesterday on the telecom bust. There is also an article in Business Week to Vulture funds trying to salvage assets for the tech meltdown.
I'm not smart enough to pick out the 5% winners at this time - maybe by November I'll find a few.
(might be chip suppliers for WiFi, 802.11b [like Intersil ] , or a small middleware company which gets bought by HP or IBM in the middleware battle)
The tech exodus (now there's a stock: EXDS) and rotatin to grocery, beverage, and financial stocks may have have acquired self -fulling momentum, now that more investors are giving up on tech. Valuations are still too high, and there will a gauntlet of bad preannouncements between now and the end of March 2002.
Risk / reward is just lousy for stocks with P/Es of 30+ which miss numbers - would you rather be in an oil & gas company with a p/e of 8 and a price /cash flow of 5 which misses number. I have puts on APC,DVN, and EOG now.
For the tech stock, it drops >25%, and you have to wait 2+ years for it to come back.
For oil & gas, it drops 15%, and it comes back next winter. Plus, you are likely to get a dividend or 1-2 %
Plus, you have a chance of being taken over at a premuim, or having take over rumour push the stock up so you can get out close to even.
Now, will some make the tech case ? |
