Maybe, you're right.
Most likely Dell and others will grow into their P/E's, bringing them down to their historical averages. That means little if any price appreciation over the next few years. The risk is that Dell will not be able to continue its growth pace. I know that's blashemy on this thread, but I believe it's already taking place. The earnings report next week and analysts' reactions to it will tell the story.
IMO, in the next few years, which I believe will be a difficult investing environment, I would rather keep my money in undervalued blue chips like MO, pharmaceuticals, and the oil sector. There's a price I would buy Dell and CSCO and others at, but not at these levels. Just to let you know I do believe in the future, I own T, LU, and CPQ. They're definitely more fairly valued than DELL and CSCO.
One final note. I believe you responded to someone else about "momentum" investors. I totally agree with you. It's difficult to calculate how much of an impact on price these guys and daytraders have on stocks like these, but I believe it to be substantial.
Regards,
Dave |
