Tim,
I agree with you, but it is really hard to judge the stock's value, and what should be the right price. Example, how are you going to judge the value of Yahoo, AOL ?
The PEs for those companies are very high and some even are negative, but the stock price is very high . People judge the value not just with PE, but the growth rate, the future market potential of its product, the risk factors ...etc, it is really a complex game. We all know the e-commerce is still in its infancy, more and more people get on line everyyear, so, the investors know that the future is great for those companies and the risk factor is low .These are the value of those stocks.
Talking about LU, well LU is a big cap company comparing to CSCO, very diversified and strong in every of its product line, with strong R&D , the Bell Lab alone worth more than CSCO as a company. As you know , strong R&D is the blood
for high tech companies like Lucent. Since Lu just came to the market less than four years, As its market shares and customer base continue to grow, the growth rate will
pick up. |
