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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: gpowell who wrote (22822)	6/1/2000 9:03:00 PM
From: ahhaha	Respond to of 29970

Does this assertion hold if we replace cash flow for profitability? Cash is net income plus depreciation. Depreciation is not meaningful in a company engaged in high R&D in most cases because high R&D is mostly associated with young rapidly growing companies which haven't matured to the point where they can borrow and shoot themselves in the foot. The sure inflexion point of corporate health is the day the borrowing starts. That is what R&D guys do, and is also why they need well rounded graduates of liberal arts colleges to manage them. There is focused R&D like what you see happening in the young rapidly growing companies and then there is R&D done by the mature companies which is focused but is devoted to a melange of screwball unprofitable great expectation hocus pocus nonsensical experimentations or desperations. Compare R&D done at MSFT or SUNW with that done at PG or AHP. LU's stock is doing great. My view is that since LU has cut through the primary uptrend, it has entered into a sideways major top or has already put the top in and now can expect no better than sideways. It is likely to chatter around at current levels while other techs rebound in this bear phase rally. It can't be known yet whether the bear phase rally will fail in an appropriate fashion, and establish that tech is in a major bear market. SUNW, MSFT, LU, among others, are currently pointing in that direction. It surely can't be expected that the earnings growth can continue as it has. Also, the coming brief respite in interest rate increases won't last for all the reasons I've been giving elsewhere for the last 2 years or for that matter, the last 20 years. LU has tough sledding ahead.