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Technology Stocks : QUANTUM -- Ignore unavailable to you. Want to Upgrade?

To: Nick who wrote (5956)	12/2/1997 11:15:00 PM
From: Rob S.	Respond to of 9124

The market is perfect if you believe the theory taught in finance 301. The trouble with that theory is that the rationality is only true over a period of time. In the long run a stock will be valued based on its perfomance relative to its risk (volotility, market domination ie. stability, etc.). In the short term we get the over-exuberance like we had when Quantum ran up to around 42 ahead of earnings that justified that price, and now down to a price that is only justified if a worst case scenario develops. In between somewhere is a "fair value" based on current earnings discounted for current risk factors. I think that the west could have the attitude to just patch things up in Asia without demanding widespread reforms. That would put a bandaide on the problem and make people feel better for the short-term. They are apparently doing the right thing in Japan and forcing S. Korea, etc. to do the right thing by refroming their banking and finacial systems. That will lead to greater prosperity over the next decades. In the short-term there will be a lot of news for the media to pick up on. People in many Asian countries are unsure about how much they can trust the system to work for them rather than for the cozy finacial institutions (kanban, whatever).