Ramsey,
Hi, I've been lurking for quite sometime and just could not resist
to respond regarding the P/E argument. I hope by now you have realized
this is like the "Phillip's Curve" which most economist claims now is
an obsolete tool. I think P/E is not a useful tool for the market we have been the last few years
The technology age gives tremendous power to investors and fund managers. Stocks moves based on news, momentum, and perception. For now, the semi equipment is coming off it's low and is favored by the analysts and news media. Funds are moving out of the internet stocks to the semi equipment. We all know this will not last long. It is the new wave of investors job to work hard and read when this will happen.
I agree with you that the earnings are not as good as years before.
Of course. By now you should also have figured out that all what the street looks for were beating the consensus or the whisper number. Most of estimates were a lot lower than 2 years ago.
I would hate to say that these days, P/E doesn't mean anything. These leaders like CSCO, LU, MSFT,YHOO etc moves because investors perceived their monopoly and leadership as AMAT.They don't care about their P/E.
I also would say that it is suicidal to go against AMAT the next few days. We all know that AMAT will report a better than expected earning.
These are just my observations.
Congatulations to the AMAT diehard bulls like Paul, Brian, Lester,GM and Tito. They hanged in there and now reaping their rewards. Just a word of advice, we know that this sector will be out of favored again sometime. Know when to get out and buy again when the stock is low.
Good luck to all.
Roly |
