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Strategies & Market Trends : Technical analysis for shorts & longs

SPY 691.72

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Jan 16 4:00 PM EST

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To: Clint E. who wrote (9350)	11/12/1996 10:35:00 PM
From: Techie	of 69822

Clint, the PC business is seasonal. You can't expect them to do 1.6 each Q going forward. Maybe they will, but the street doesn't look at it that way. You have to take each Q and add a % for Y/Y growth. You also can't compare the margins networkers enjoy to that of boxmakers. Now, Dell has pretty good margins, but they get grouped with the rest of the boxmakers for valuation purposes. So, you'll never see a P/E of 100 even if they are growing at 100%. Chip makers are mostly commodity business (though Intel is changing that), so their P/Es are derived accordingly as well. As far as I am concerned, the networkers won't enjoy the same P/Es going forward either. That space is getting too crowded and people are watching to see who'll be standing up when it's all done. Techie

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