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Strategies & Market Trends : Dave Gore's Trades That Make Sense -- Ignore unavailable to you. Want to Upgrade?

To: canmar who wrote (7710)	6/6/2002 7:55:21 PM
From: Dave Gore	Respond to of 16631

Marc, it's really hard to say. I have spoken a lot about ridiculous valuations on stocks like TER, MANU, and others... and you're right there are DOW stocks overvalued as well. What has been hard to figure out is whether valuation principles will ever REALLY start to matter in a more universal way. Last week, I was shocked to find that AGM, one of the best and most consistent growth stories over the last two years, had tanked from $45 to $25 on rumors and a grossly inaccurate NY Times story. I bought it and spread the word and it quickly rose to $31 that day. It had a PE of about 14 at the time and a PEG of .70. Yet we still see stocks like TER that will LOSE .95eps this year and is priced at 27. Huh? Or ESST with a PE of 12 and PEG around .50. It was also manipulated on rumors, even though it is in a very healthy sector and beat by 10 cents in their last earnings report. So not only are there inconsistencies with how valuations are applied, even to stocks in the same sector, but wild rumors are believed above all else. This makes the Market a very difficult, frustrating, and even crooked investment environment. Now we have a story about how our corruption is causing foreign investors to pull money out of our Markets in droves. All in all, our Market is very inefficient and problematic right now. It started with the dot-coms and it hasn't righted itself yet. I guess today, the NYSE is announcing some changes that they help will restore confidence. We need all the help we can get.