sure I have plenty of evidence, because when I first started investing in the 90s in tech, I tried to buy the cheap stocks.
Example, lets take the software area, mid 90s (pre bubble, I'm thinking 94 or so)
Cheap stocks: ASK, MFG/Pro (forgot the symbol), boole and babbage.
Expensive stocks: Siebel, peoplesoft.
Same market space, application software. Obviously the missing ingredient in the first group was growth and product potential.
As for intel, I remember when the PE was 7. Around 94- it was probably miscast as a cyclical play, based on when intel was a memory producer. But that could have been one of those freaky anomalies when the market potential of a company changes and there is this window where investors don't quite realize the shift has occurred? Same thing happened to oracle, once just an application software vendor and later the premier enterprise platform provider.
BTW you like google right, is that an expensive stock to you? I really am curious. I think google is expensive but I am willing to pay. I like that they hire all these PhD's and give them a lot of freedom, and I think they treat the shareholders money well without too many options grants. |
