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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Frederick Langford who wrote (3265)	11/5/2001 6:29:14 PM
From: mishedlo	Read Replies (4) \| Respond to of 99280

Perhaps because all the crap that is left is still in a bubble. Sure HOMS is now down from 34 to 4 or whatever and so is SONS. B2B imploded. What about what is left? I suppose you think CSCO is not in a bubble. Is EBAY at a PE of 200 or whatever in a bubble. Is QCOM in a bubble. With no growth in capex for perhaps 2 years is AMAT KLAC NVLS in a bubble? How about INTC. Where are PC sales going. Is INTC in a bubble? The bubble out there is enormous. But with greenspan at the pump, trying hard to reflate the bubble, it can get bigger yet before it pops. How can you not see a bubble? M

To: Frederick Langford who wrote (3265)	11/5/2001 6:48:20 PM
From: sea_biscuit	Respond to of 99280

The answer to your question is in the following article excerpt : Now that these tech stocks have conveniently gone to negative earnings, P/Es, to the bulls' relief, are not relevant. But, again, who says we need to use this year's E? For fun, go plug in the 1999/2000 peak earnings into many of these babies. Those earnings are probably a cyclical high, and pumped up by "investment gains" and accounting gimmickry of all sorts, but the P/Es using even those inflated peak earnings still show the tech world to be very expensive. Paying very high multiples in good times is usually a bad idea. Paying these multiples (on peak earnings) for these companies in a recession (and a deep one for tech), well, that's just nuts. ------ How can we be in a bubble at 1800? For the same reason that the Dow was in a bubble after being down 70% in the 1930's. Sure enough, it declined another 65% from those levels to make the eventual bottom at 89% down from the peak. A decline of 65% can happen only if you are in a bubble. The Dow was in a bubble even after being down 70% by 1931. And so is the Nasdaq right now.