John,
Re:You are certainly going to be willing to pay less for a given amount of
AMAT expected earnings (including growth in the expectations) than for
the same amount of Coke's, because it's riskier -- that's theoretically
correct
M The point I was trying to make was that IMO AMAT's eps forecast of $1.69 was probably LOW whil KO's of $1.74 was probably high. In this sense then I think it would make at least some sense to comaper the two. Even after the dreastic eps forecast slashes of the past 2 mos, the low is $1.69.
Re:Well, this is only really true if "any given year" is 1995,1996, or 1997
:-) There's actually a fairly good reason why active portfolio managers
have had such a hard time beating the S&P 500 recentl
True, the performance is better prior to these past three years; but not by much at all! Something like 60% on average over the past 20 years. Pretty pathetic in my estimation.
Re:, it's that the market is really pretty efficient; and it's efficient
because there are so many really smart people out there trying so hard
to beat it!
During the past couple of years, there has been a dramatic increase in momentum investing. A scary concept. One that puts the fundamentals in the back seat and plays the stock as if it were a game. With this type of behviour common in the market, how can anyone claim market efficiency??? We have companies like Yahoo trading at 800X next years consensus, while some of the equips are trading at 10X this years eps, less than BV, etc etc. IMO, the market is more inefficient than ever and its inefficiency is displayed probably most in the DJIA. We have herds running into stocks and indexing, not investors analyzing the underlying fundamentals. A disturbing trend IMO.
Regards,
Brian |
