Joan: I agree with you on software (have said this in previous posts). Oh the other hand, the market discounts software companies more severely when they become out of favor , the market carries a much lower valuation of a software company that isn't fashionable, even though its innate capacity to produce software, its "book value", may be quite high. Look at novell, apple, corel, borland. Count number of highly paid competent engineers, replacement and training costs of engineers, cost of computers and buildings, ability to produce software, etc. In a bear market the software stocks will suffer the most.
Could this be the extrema of the bull market: the double bottom (maybe) in apple coinciding with the double top in microsoft? |
