Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Zeev Hed who wrote (76529)	5/4/2001 6:57:26 PM
From: David Howe	Read Replies (1) \| Respond to of 99985

<< I do not disagree with you on a fundamental basis, but on a technical basis liquidity drives stocks just as much as the stocks' (or market's) fundamentals do, and right now, with MZM having rocketed there is a lot of liquidity ready to go to "money heaven" >> My opinion is that for many of the large cap tech stocks the fundamental valuation isn't that far off. Maybe a bit rich, but if there is an economic recovery in the making I think they'll do just fine. MSFT for example is a huge part of the Nasdaq and it seems to have weathered this downturn just fine. Liquidity is high and that will inflate PE ratios. I don't expect the liquidity prop to go away any time soon. The baby boomers are in their peak earning years and will be for another decade. That's a lot of money looking for a place to go. PE's modestly above their normal levels (ie. MSFT PE at 40 in lieu of historical norm for big cap <Dow> of 15 - 20) is a reasonable result. IMO, Dave