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Strategies & Market Trends : The New Economy and its Winners

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To: techanalyst1 who wrote (9160)	10/12/2001 3:13:43 PM
From: Wizard	Read Replies (1) of 57684

>>Valuations do matter, or I hope so this time. Even pre-'99, valuations on a lot of stuff was tricky. Even when JDSU, PSFT, SEBL etc... looked 'expensive' the stock prices still rocketed... Then we had a period there where stuff was priced by discounting 5 to 10 years out back to the present and making big assumptions about growth in years 1 thru 5... Now we are applying trough multiples to depressed quarterly run-rates of biz. Its really come full circle. What if BRCD makes and revises quarterly estimates up for the next 25 quarters like CMVT or CSCO did last cycle? How do you value that now?? Valuation does matter but I would argue that valuation is only 30% of the equation... Growth trumps value if company XYZ actually delivers the growth, with the only problem being extreme overvaluation.

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