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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: JRI who wrote (2180)	3/7/2001 10:35:33 AM
From: Paul Shread	Read Replies (3) \| Respond to of 52237

Obviously, the COMPX was way way overvalued at 5000, but the 60% drop since then matched its '73-'74 bear, the unravelling of the last big bubble. Interesting to note that last March, the underperformance of value to growth was at its widest since 1972. The COMPX may be reforming the 1990 trendline, at a level about 13% lower than the previous line. I don't know what exact annual rate of return that trendline represents, but it's probably gone from 25-30% a year to 20-25% a year; much more sustainable if your 25% long-term growth predictions hold up. We'll probably get a lower growth rate than that over the next year or two, maybe 10-15%, but who knows. AG claims that inventories are being unwound at a rapid rate. Would like to know the PE of the Nasdaq at the 1350 bottom in Oct. 1998; so many unprofitable companies were dumped on the public markets in 1999-2000 that I don't know how you could calculate anything from the current PE ratios.

To: JRI who wrote (2180)	3/7/2001 10:54:40 AM
From: donald sew	Read Replies (1) \| Respond to of 52237

JRI, >>>> It does seem logical, then, to look back to the period 1991-1994 as a better benchmark for valuations for these companies going forward vs. any PEs after 1995.....1991-1994 was mostly pre-liquidity pump, mostly pre-tech religion, and mostly pre-internet religion <<<< Im in full agreement, and have been saying that P/Es will return to historical levels since 1998. As for comparing it to the 1991-1994 P/E levels - that makes sense, rather than earlier periods. which would be even worse. My understanding is that the NDX P/E has been as low as the 12-15 in the really bad years, but historically around 20-30, with the SPX in the 15 range. As for what was the more precise P/E's specificly in 1991-1994, I dont know. Also believe the current P/E's is around 60 for the NDX. Can anyone help and advise more precise levels.

To: JRI who wrote (2180)	3/7/2001 11:21:40 AM
From: Paul Viapiano	Read Replies (1) \| Respond to of 52237

Just curious...but would we have seen cyclicality in these stocks/businesses if it weren't for Greenspan's raising of rates? This seems to be an artificially induced recession/slowdown...very real nontheless... Guys like Larry Kudlow were screaming each time the Fed moved, the evidence just was not there...

To: JRI who wrote (2180)	3/7/2001 1:09:22 PM
From: Andy H	Read Replies (1) \| Respond to of 52237

I agree with the thought the tech will be revaluated to the 1991-94 valuations. The semi equipment makers will have to fall quite a bit to hit those valuations unless orders pick up right now. In spring 1994, CSCO "warned" that its growth would fall to the 6-8% sequential quarterly growth range (that was viewed as quite a disappointment back then!) and the stock tanked to a forward PE of around 15-and that PE was with those 1994 growth estimates that it would love to have now. Give CSCO a 15 forward PE today even with its barely visible growth rate and you come up with a price target a lot closer to $10 than $20.

To: JRI who wrote (2180)	3/7/2001 2:27:15 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 52237

Yes, that is a very basic question: did the bubble begin in 1995, or not till the end of 1998? Whether you use the charts and draw trendlines, or use average PEs, P/S, P/CF, etc., you have to decide when we left the normal range. If you think that only 1999 and 2000 were "outlying data points", to be ignored, then we have now about given that back, and it's time to go long tech again. OTOH, if you are going to throw out everything that's happened since 1995, then we've still got a ways to go (on the downside). I don't know the answer to that question, so I'm just evaluating each company on its own merits. When I can get a stock at a PEG of around 1 (guessing forward 12M EPS and LT growth rate), then I'll consider buying it. The main problem with my method is that forward 12M EPS have been (and continue to be) ratcheted down severely. 6 months ago, TXN was supposed to make 1.50 in 2001. Now? maybe half that.

To: JRI who wrote (2180)	3/7/2001 2:48:59 PM
From: StockOperator	Read Replies (3) \| Respond to of 52237

JRI, I have my own ideas regarding what might be playing out here. The mantra of the market has been to buy them when they stop going down on bad news. That is what people have been told and I'm sure the action of the past couple of days has given the sense that a bottom is here. Remember people are generally greedy. Everyone wants to get in as early as possible before the next big run-up. On the other hand my mantra for the past six weeks has been that the majority of tech stocks are not in a position to move prior to the end of the 1st qtr (I know you're probably sick of hearing it<gg>). Therefore, prices are limited in regards to how far they can run. If you at least accept that opinion for just a second you realize that the only way the market can suck in as many people as possible is to offer us a pre-open "climate" conducive to getting people to buy stock. What better way to do it when the upside is limited. If you noticed much of the upside has been rotational at best. Plus if you examine the last two days worth of trading, besides the obvious lack of volume, prices have been opening and closing on the weak side. For example the COMPX could close almost anywhere in the green today without taking out the highs and today's trading could open the door for trend reversal. At this stage I am watching for that churning in prices that I mentioned yesterday. If this market starts to roll over I believe all the recent bad news will have to be redigested.