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.

Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: kvkkc1 who wrote (56783)	1/17/2002 1:31:50 PM
From: Stock Farmer	Respond to of 77400

My point is that the stock market is beyond reason when making use of old fundamental statistics You and me both!!! Of course, I don't like the simple ratios (P/e, P/g, P/fcf...) but that's just a mater of style. Broken in one place tends to break things elsewhere. I guess the next question for a long term strategist (e.g. myself) to ask is "is this new situation more permanent, or temporary". If it's permanent, then time for new models. Period. Fold up the tent and make a new one. Folks like me who like making decisions based on models are SOL until we can make up new ones. If it's temporary, then the models (which support the conclusion I personally believe stocks are overvalued) portend a time in the future when stocks will become less overvalued - e.g. as the end of this "temporary" goofy period nears. In which case profits between then and now on an existing position will be negative. Based on a historical perspective that includes several cycles of boom and bust over hundreds of years, and a certain personal experience with the degree of innovation that the financial industry embraces, well, I can't bring myself to believe it's permanent. Remaining in rhyme with mankind's past history. So I'm biased towards temporary. The next questions for a strategist with my view are: (a) how long is temporary, and (b) what do I do meanwhile Me, I haven't got the foggiest clue how long "temporary" is. Based on the magnitude of the apparent brokenness and the duration of Temporary in similarly broken other parts of the world (e.g. Japan)... it just seems that any strategy that requires a near-term reversion has embedded danger. There is a kind of middle ground of a quasi-permanent brokenness in which some things change for good and others merely wander off course and get back on again. Which is the more likely scenario. In which case selecting a few of the more fundamental fundamental pillars seems like the right strategy. That and lash-me-to-the-wheel (if out at sea) or stay in port (if already there), 'cause the storm looks like a doozie. Doesn't sound like you and I are that far apart on the long view. But you have more courage than me to be in scalping in the short term. John

To: kvkkc1 who wrote (56783)	1/17/2002 3:07:49 PM
From: GVTucker	Respond to of 77400

kvkkc, RE: My point is that the stock market is beyond reason when making use of old fundamental statistics. P/e, P/g, P/fcf, imo just seems useless right now. I personally believe stocks are overvalued, but lost money buying puts the last 3 months. Well now I understand. IMO, fundamental analysis is indeed useless if your time horizon is only three months. There are other people out there that can consistently make money on short time horizons, but they don't care about fundamentals. Granted, John's points are also valid. Anyone that just looks at something like P/E or P/FCF or anything like that without regard for the whole host of other variables is asking to lose money.