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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Jdaasoc who wrote (38723)	3/22/2000 6:45:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 93625

Come on John, we are pretty close to a max in general valuation, WMT and GE are growing at a clip of 15% to 20% for sure, so in four years, this PE will be almost half what it is now. Yet, you will find many forecasting that in a bear market these PE will be halved. By the time RMBS earns these $7 to $10 (four years hence), their own growth rate looking forward might not be much greater than that of the industry at around 15% to 30%, thus then (four years hence) they should have a PE of 45 (like GE and WMT have now) if the market does not go through a severe bear period in between. Paying today for RMBS a PE of 50 on what they will earn in 2003 is more than fair valuation. I know many bears that would claim that paying today a PE of 30 on those future earnings is a lot, and of course, those bears do not think these earnings are bagged by any means. Four years is a lot of time to wait to see if indeed $500 will be reached. Now, don't misunderstand me, I think that if we breach the $430 area we will reach not only $500 but $600 and some, and that will be , IMHO, overvaluation, but in the current market, money is chasing stock and such overvaluations are the current norm. For now, I think we have to absorb some of the technical damage inflicted, and I am of the opinion that we will not see a breach of $430 so fast. RMBS, however, has surprised me before with the violence of its moves (both up and down). Zeev