Zeev's Turnips - No Politics Message Board

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Strategies & Market Trends : Zeev's Turnips - No Politics

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To: LTK007 who wrote (60848)	5/2/2002 9:38:53 PM
From: paul_philp	Read Replies (1) of 99280

itsallover, there is certainly no appetite right now for any large IT projects anywhere and it will take a least two quarters of earnings growth before many companies open up the purse strings. however, the largest IT purchasing companies are NOT sitting on opened boxes of equipment they got suckered into buying. what companies buy and why will be very different when they start buying again and many of the old fliers will not fly again. there will be buying again and the smart companies are cleaning up their internal systems to get ready. the problem with earnings growth percentages is that you are starting from a very depressed number. as revenues begin to climb we will see technology companies with 500%, 600%, 1000% earnings growth - simply because the just managed to break even. earnings numbers from 98 and 99 are useless because they are too inflated. earnings numbers from 00 and 01 are useless because they are too deflated. using 96, 97 earnings (or earnings margin) can be somewhat useful in determining if a company is over-valued. some are. some aren't. at these levels there are no simple rules. it was much easier two months ago. Paul

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