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Pastimes : Ask Mohan about the Market

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To: Bilow who wrote (10609)	12/9/1997 4:24:00 PM
From: Cynic 2005	Read Replies (6) of 18056

To all, where is the leader? It is sad but could be very true! Some of the tech-stock bulls of July/August/September must have been decimated by now. The outrageous valuations they have given to Intel, Msft, Oracle, Cisco and the like have enticed enough long term investors to pull the rug under this house of card. Sure there will be enough suckers to keep on buying on the dips. Soon enough, there won't be enough gullible money left to lift these stocks to the outrageous valuations again. I was confronted by one bull to justify my blanket statement "these outrageous valuations can't be sustained. period." I don't remember if I responded to his challenge. But, here is something to think about. Intel is valued at $135 bil @ $75/share. $135 bil is a lot of dough. It is difficult to have a feel for that much money. [As far as I am concerned, I have trouble having a feel for 10k. -g-] Compare that to the cost of bailing out SE Asian countries which is estimated at roughly $120 bil. Now, Intel the leader of late 96 and early 97 is in the barrocks. Oracle, the market leader of yesterday is in the dumpster. 3COM a great growth stock till December of 96 is in doldrums. Who are left? Cisco and Microsoft! Leave the Microsoft stock machine alone. Cisco will have to lead the rest of the tech leaders or follow them. Just one more time, Cisco - though a great company and market leader - is not a monopoly and it still competes with others. When they are going down, they will not go down without a fight. Don't bet against the market leaders? You bet I will! -g- exchange2000.com ------------ An interesting note from John Hull of Intel. exchange2000.com Intel faces the demand risks created by unstable currencies and the effect that has on buyer intentions in those regions, but we face very little currency risk per se as the vast majority of our sales are dollar denominated. Good luck! -Mohan

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