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Strategies & Market Trends : The Art of Investing -- Ignore unavailable to you. Want to Upgrade?

To: Frank Sheridan who wrote (788)	9/25/1999 10:12:00 AM
From: jttmab	Read Replies (3) \| Respond to of 10713

Frank, I've seen much of the same on market valuations. Straight P/E hasn't been my favorite valuation metric for quite some time as it looks at the past rather than the future but it does, IMO, have a place as long as it is considered in the context of future prospects. I have my preference towards looking at PEG or YPEG or at least a rule of thumb current P/E compared to consensus growth rate. It seems though that some of the technology sector has gone well beyond this, nets notably. It has gotten to the point where the analysts can't even find or create an evaluation model to support the current share prices; you just got to "believe". It looks to me that some of the assumptions are breaking down. AMZN is seeing increasing new accounts with declining orders; revenue streams from advertising, declining as well. AMZN early on was brick and mortarless; they are now building 5 wharehouses I believe. I do believe that we have been migrating explosively towards a new business era of sorts centered around communications, so the plays in infrastructure have a lot of merit. But I'll bet that the businesses like CMGI and EBAY are in the long run doomed. The "infrastucture companies" will overwhelm them as they migrate towards communications/information conglomerates. DELL and MSFT, for example, are in the process of migrating. I will say that I went to cash, a couple of weeks ago and plan to sit and watch the markets over the next few weeks to months; I am expecting a 14% or 21% correction off the market tops....subject to change <g>. Shorting is a possibility, but I'm inclined to look at QQQ or HHH as possiblities rather than individual equities. I am astounded at the pundit reaction to Ballmer's statement on technology equities being "absurdly overvalued"; it is generally discounted as a typical statement from MSFT to lower expectations and then over achieve....I saw a tidbit the other day, if I remember it correctly...insiders at EBAY in the last 12 months have sold more shares than EBAY gets in revenue to the tune of a factor of six. Best Regards, Jim