I'm an old-timer. I remember in '74 when companies that were growing at 20%+ a year traded at 12x earnings _ or less in some cases.
You can find them again in this market. It's been a long time, silliness has reined supreme for so long, but there are real bargains out there.
And no, I don't mean F. I mean companies that are growing, not mired in some unholy quagmire.
The president's decision today on generic drugs means the big drug companies will have to spend heavily to develop new drugs. The generic drug makers will benefit, the biotechs will benefit, and, longer term, the big drug companies benefit by discovering new treatments.
Health-care is a good secular growth story, but only recently have valuations become attractive.
Tech is looking a little better, too.
As for GS, keep in mind that investment banking has been flat on its back for, well, 4 or 5 years now. Which is not to say GS is a bargain. It's just that GS and JPM and so forth already have survived a harsh climate for a good spell. The bucket shops are one thing, GS and JPM are another.
Only my opinion, and I have been known to be wrong.
PB |
