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To: Larry S. who wrote (48592)	6/12/2003 10:00:19 AM
From: E.J. Neitz Jr	Read Replies (1) \| Respond to of 53068

Goldman Sachs comment on Technology: Tech Navigator: Between fantasy and fundamentals While we stayed negative through the first 4 bear-market rallies of the downturn, the 5th is different enough to make us less comfortable in our Cautious position than before. But with valuations stretched and fundamentals flattening out, stability has to give way to recovery soon if the stocks are to maintain current levels. At 1.9X the S&P 500, tech's relative valuation appears too rich to be supported by what little fundamental improvement has actually occurred. Thus one of two things should determine the fate of our Cautious view -- either tech cos. will grow into their lofty valuation via the combination of oper'g leverage and a robust near-term recovery in capital spending, or the tech tape will be forced to correct into the slow summer months. In our view, we remain mired in an IT environment without game-changing technologies and most of today's major tech trends are likely to destroy more value than they create.