Janice,
Of course Greenspan intended to influence the market, but not by way of a couple of days' reaction. Rather, he's looking to dampen inordinate, oops, IRRATIONAL exhuberance in the large caps where most of the recent market gains have taken place. I believe he sees some glaring overvaluations, as I do, in some of the big caps -- KO and G, as examples, with their 15%-or-so growth rates are selling at P/E multiples approaching 50! (By contrast, USRX, with growth-rate-to-P/E four times as large as theirs is considerably undervalued.).
A retrenchment in the blue chips is desirable for the good of the overall market, IMO. What do you think, Janice? |
