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Technology Stocks : Dell Technologies Inc.

DELL 133.92

-4.9%

3:59 PM EST

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To: McNabb Brothers who wrote (25022)	12/14/1997 3:38:00 AM
From: Chuzzlewit	Read Replies (2) of 176387

Hank, your reading of bear market pricing is only partially correct. Stocks selling at low multiples generally occurs when bond yields are quite high. Typical economic cycles end with inflation and high bond yields which are responsible for the fall in p/e. Looking at p/e alone is a good way to fool yourself. Right now we have a lot of money flowing into the US bond market. If anything, the expectation would be for P/E expansion were it not for decreased earnings expectations arising from the Asian monetary crisis. We've seen some significant earnings shortfalls such as ORCL, and some severe oversupply problems such as dd's and drams. But none of these problems are due to Asia per se. The market is currently running scared on hi-tech issues, but I suspect we will get a better fix on the results of the Asian monetary crisis come mid January when we've had a chance to digest 1st quarter earnings reports. Regards, Paul

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