>You are making a major mistake if you think
>the Internet stocks are way over-valued.
I disagree. Just because people are chasing them, that doesn't do anything to improve their fundamentals.
>Just because the industrial stocks are in a bear market
>that doesn't mean there is some sort of "bubble" going on.
The bubble is in the Internet stocks, not in the market as a whole. The problem as I see it is, eventually, over saturation -- it's too hard to hang on to market share and too easy for others to copy. The Internet is the closest thing to a pure market as ever there was. Take Amazon -- to justify its valuation they would have to sell every book on the planet. There is definitely upside potential for these companies, but the upside is sold out (oversold) before these start ups even have a chance to achieve earnings. By then a competitor is likely to have stolen, or at least diluted, their earnings capacity.
As far as CompUSA, I see that as a turnaround opportunity. It's a stock that everyone has left for dead and it has, in my view, a lot of upside potential from its current price. I see Novell in the same light. Surely you aren't comparing these companies to overblown issues like Ebay just because they're tech stocks? Anyway, we should probably be having this discussion in the CPU forum, but you brought it up so I thought I should answer. |
