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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Hawk who wrote (63416)	5/4/2002 10:57:00 AM
From: Barry	Respond to of 70976

>>Will the rally happen in our lifetime?<< >The problem is that everybody thinks that sometime down the road the market will come back, will it ? Look at Japan, I know thats comparing apples and oranges and their problem are different then ours. However, continued deterioration in prices of big company stocks(WCOM, SUNW, JDSU, ect.) may in itself hamper future growth by restricting capital available to them< Hawk, I think your comparison to Japan is valid, a compelling same fruit argument. Bubbles are bubbles, and the larger they are, the longer and louder they pop (and the indices drop). The bubble was comparable in size to the real estate and manufacturing-based bubble of the Japanese market in the late 80s. It'll take years to work off the excessive capacity building capital investments of the past four or five years. What's going to soak up supply? We seem to have the unnatural ability to double speed or storage capacity every 1.5 or 2 years (limits WILL be reached in the future, unless we find infinite ways to divide quarks or find that there is no limit to the frequency of light), and yet, demand is as lumpy as the Cincinnati Bengals. Businesses don't get much additional productivity out of upgrades from Windoze95 to 2000/ME/NT relative to the upgrade from DOS to 95. Valuation comes down to modeling discounted cash flows. With the likes of Oracle and AMAT and JDSU still selling at pricey multiples to SALES, let alone earnings, which have been inflated because of the lack of accountability for options dilution (probably the greatest wealth transfer in the world has taken place from the shareholder masses to the very few corporate executives via the issuance of options since the late 1980s), this market and the SOXX is still overvalued. More pain will be served until the bearish sentiment is much, much higher. I only wish I could have been more disciplined - I am a sentimental B&H investor, and this has stunk for the past year and will be a poor strategy for the rest of the decade. Take a look at the NIKKEI - many upswings of 25% and even a few of 50% over the past 15 years, but in the end, it's back where it was so many years ago (albeit probably undervalued today). Best of luck to everyone - trade well. Swing trade well.