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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (69415)	2/17/2001 9:27:37 PM
From: Sweet Ol	Read Replies (2) \| Respond to of 99985

Zeev, Actually I was not particularly knocking JDSU, I was just using it as an example. JDSU & F were the first two I came up with on SI quotes that were approximately the same market cap. All I wanted to point out was how far away from reality some of these evaluations have become and that is why I think there can easily be more downward action. The original question had to do with techs being attractive after 70% haircuts. I was just pointing out that they still are not attractive from the standpoint of an owner. All of that has nothing to do with their attractiveness as trading vehicles. I will continue to short "overvalued" stocks as long as they are trending down and go long when they trend up. We have to play the cards we are dealt. By the way, using the expected earnings for JDSU/SDLI and compound them at 45% it takes 11 more years to earn more than F with only 5% growth. It seems to me that the risk of JDSU executing at an average 45% per year for 11 years is far lower than F executing at 5%. After all, F has been doing better than that for 75 years. Again, the only point I am trying to make with this example is that if your rich uncle dies and leaves all of JDSU and F to you and your brother. You get to choose first, you can take one or the other. Which one will you choose? Just as bond yields got inverted but they are straightening themselves up now. I think that evaluations will eventually get sorted and risk premiums will once again become a meaningful factor. I don't have a clue how long it will take this to happen, but it seems likely that it will eventually occur. Best to all, John