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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Joseph Beltran who wrote (15355)	3/3/1998 8:36:00 PM
From: C E D	Read Replies (2) \| Respond to of 25960

Just reading the days posts, not much here, but someone mentioned JMAR. Betty, oh Betty where are you, we haven't heard from you in some time. I miss Mason also, his views on CYMI have proved largely right, and hopefully he is correct about a little CYMI fever, we could use some. Regards, Ed

To: Joseph Beltran who wrote (15355)	3/4/1998 11:43:00 AM
From: Elroy Jetson	Respond to of 25960

Why do I say the rest of the market is fully valued? The yield on 30 yr US treasuries is 6.05%. The inverse is 16.5x earnings for a company that is as safe as US treasuries and whose earnings, like bonds, do not grow.. S&P stocks are expected to grow earnings at 6% going forward. So that's a p/e of 16.5 plus 6x equals 21.5x. Is the S&P selling for less than 22.5x earnings - not. S&P stocks are selling at a 26.1x p/e. So can S&P earnings longer term grow at 9.6%? If so the market is fully valued. You mention Microsoft at 55x p/e. 55 minus 16.5 is 40.5% earnings growth. Can Microsoft do this? Probably. Actually, for stocks with higher p/e's the rule of thumb is not to subtract the 16.5x. This gives you less reliance on the same growth for eternity. Can Microsoft grow earnings near term at 55%. You decide. Guess what. Today my ex-Tech portfolio is up slightly and the rest of the market is down. Why did I say I don't think there's much further downside on Tech but the rest of the market is fully valued? Because it is.