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Politics : High Tolerance Plasticity

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To: kodiak_bull who wrote (8773)	9/27/2001 3:42:35 PM
From: energyplay	Read Replies (2) of 23153

Valuing Nasdaq - Software companies with recurring reveue get valued at sales multiples which are like the earnigs multiple because thay have really high margins and you can fire most of the programmers & collect tons of money for a number of years. SO software (almost pure profit) might stabilize for 4-5 times sales. Semiconductor companies, with heavy capital & R&D requiremnets tend to sell for between 1X sales and 2.5 X sales. Blending the two, a Nasdaq at about 2.5 X sales might be reasonable - that would still be about 500-650, and about 60% lower than we are now. With some overshoot on the down side, we could go to 300. Yikes! Remember taht after it drops to these levels it's likely to be flat for while. Looking at 1932, Don't buy in on the way down. If we hit this, chances are Silicon Investor won't be here .... Am I getting too negative ?

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