JDS Fitel Message Board

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Gold/Mining/Energy : JDS Fitel

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To: Hank Stamper who wrote (705)	2/4/1999 1:42:00 AM
From: Praxis	Read Replies (2) of 815

I agree that it will be very hard for JDS to maintain a mulitple of over 70 for a period of time. These valuations built in to these technology stocks are 'blue sky' valuations bid up by investors and the institutional players because: 1) Too much money is flowing into the funds, the anal-ysts are therefore putting it into whats hot and the prices get bid up, 2)the internet trading investors/retail are finding themselves with constant bombardment of how they must save so much to retirement, see technology companys as the future giants and the stalwarts of the new economy so they bid up the shares. When in fact most of these manufacturers are operating in what will be and is becoming a commoditized industry. JDS is an excellent company with an excellent future but what happens when these massive inflows of capital cease in the event of a downturn. The technology stocks have an average historical P/E multiple of 24 since 1985. I think the best plan with a company like JDS is to hold and possibly buy on the volatility that is sure to come. It's a great story as is ATI Tech. but just because it is growing well now, the 'blue sky' multiples don't have any room for errors which history proves are always around the corner in any company.

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