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Technology Stocks : Creative Computers(MALL)

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To: Richard B. Haenisch who wrote (531)	11/25/1998 2:18:00 AM
From: Clarksterh	Read Replies (2) of 1634

CNBC constantly reminds the viewers how overvalued these stocks are First, it isn't clear that MALL is overvalued even by conventional measures. In only another 3 quarters they will have revenues which justify their current price (P/S = 1) even if you assume a considerable slow down in quarterly sequential growth. A lot of conventional companies are judged by looking one year out ('the forward P/E is ...') so this is not all that 'exuberant'. (Yahoo is probably the most optimistically valued - it will be more than 11 quarters before they can justify their cap even if their growth slows not at all. That is definitely speculative - when was the last time you heard a fundamentalist talking about the P/E 3 years out.) Second, tulipmania is not a good thing - think 1929 or the Nikkei (sp?) in 1990. Because of the intertwining of margins, collateral, ... the crash of speculative buying can actually have macro-economic effects (although much less than it used to be) so it isn't unreasonable to 'talk it down'. At the rates these companies are growing you'll still do well even if you do have to wait 1 or 2 years. Clark

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