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Technology Stocks : Dell Technologies Inc.
DELL 121.26+3.2%12:28 PM EST
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To: TTOSBT who wrote (119160)4/20/1999 8:04:00 AM
From: Chuzzlewit  Read Replies (1) of 176387
 
In a nut shell....the move has been from MOMENTUM to Value. Where Value is defined as lower PE's

Not quite. Part of the shift has been from growth (the potential for large future cash flows) into cyclicals (with actual cash flows. The logic (?) didn't change in a single day -- it was always there. It is the logic of the momentum player and the illogic of some analysts who chose not to look under the skirts of the momentum stocks, but were blindly recommending buys on anything internet related.

AOL is a quality company. But ask yourself this: why did AOL run from around $45 to $170 in around 4 months? What was the logic there? I will tell you. The logic was that a bunch of people start throwing money at some stock just because they were going up. So they figure that they are smarter than everybody else and get out before the stock craters. Let's be generous and figure that AOL deserved 90% growth during the period. So we have a stock selling for around $85 (still pretty expensive in my book). Why should the stock have run up that additional 100%?

You have seen the greater fool theory in action. So now these momentum players look around and find that there are no greater fools. And then the entire tech market craters for a few days. We've seen it before, and we'll see it again.

TTFN,
CTC
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