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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?


To: Liatris Spicata who wrote (3352)1/3/1998 12:08:00 PM
From: rupert1  Respond to of 6980
 
Larry: I am not concerned with Accumpora(?)'s analysis. He made his modification about two or three weeks ago. I saw him last week, probably on CNN International. His range down to 6000 is, in his own words, an extreme case. His predictions are more or less in line with other analysts. He also predicts 10,000 sometime in 1999. I am not overly impressed by him. Most analysts are calling for a January effect, turbulence after that, some of it possibly due to unforseeable waves from Asia. Most are urging picking stocks rather than the market or market sectors. Most are expecting volatility (but not in the range down to 6,000). Look back at last year's predictions and the year before to put their forecasts in perspective. Not very impressive. Remeber Accumpora was saying something quite different until a month or so ago.

I am more concerned with the near term movement of BAY. Depending on results, its fair value is going to be somewhere beween 26 and 35 a share, subject to acquistions and future developments. It will be interesting to see what PE the market will put on it and how much they will pay for the future earnings of a company that is turning around but has a poor recent history. This , in turn, will be affected by the market's view of prospects for the sector as a whole hence my concern about CSCO and 3COM and the high tech sector, as a whole.

I hope the market will distinguish between companies that have large and small exposure to problematic markets in SE ASia. I hope that the same kind of momentum will be developed as happened earlier in the year which took it to an overvalued $40+ per share.

As for Europe, the conventional wisdom is that the UK will have a good year, as will Germany with others coming along. The Europeans are not exposed to SE ASIA as the Americans except in the financial sector. Europe will be affected tangentially if other economies, i.e. American, are slowed or disrupted by Asia. Europe is growing, but the great imponderable is the coming of European Monetary Union in 1999. A bit like the Asian crisis everybody is guessing about the consequences.

Vepoc