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

To: vampire who wrote (9670)	11/30/2001 4:57:10 PM
From: pompsander	Read Replies (1) \| Respond to of 99280

I don't think a comparison with Japan is valid. This country has a pattern of facing its economic problems fairly straight on.....note the layoffs, inventory writedowns, collapses (would Enron have collapsed in 1990 Japan...no way!). This allows us to recover and begin to build when demand increases and new ideas come forward to help create that demand. I agree it is all about valuation. However, if I am being given the assurance of a maximum of 3.5% annually on my bond investment dollar over the next five years (and it could be less if rates rise...not much chance of them going too much lower) and I think I can find a company which can grow its earnings by 20%, or even 10% during each of those years....AND its present valuation will accomodate growth IN THE MARKET likely to exist in the next five years....where would I put my money? Taking Intel for example. Even if PC sales drop ten percent over the next five years (not likely with lifespan of already existing boxes already being stretched) the possible technology gains of moving to bigger silicon wafers and Moore's law can still grow profits better than 10% a year, starting in 2002 (IMHO). How will the markets reward 10% earnings growth in a no inflation world? Can Intel's existing valuation "absorb" ten or twenty percent growth with no move in price? Let's say it does for three years, then breaks out in the fourth. I am still probably better off than tying my money up in five year paper. Hope springs eternal, and timing is indeed everything.