Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Ramsey Su who wrote (7487)	1/6/1999 2:19:00 PM
From: Robert Douglas	Respond to of 10921

Ramsey, you wrote: I follow a basket of big name big cap tech stocks. The average PE just went past 55 today while the average growth rate is 21. This reminds me of Japan in the early 1990s. I don't think this has escaped the attention of Mr. Greenspan either. I think you can safely say that the U.S. stock market meets the qualifications for bubble status. What can be done? I don't think that interest rates can be raised. YET. There is one tool that the Fed could dust off that would be very appropriate for the current situation, in my opinion. Raise margin rates! Don't be surprised if the Fed does exactly that. -Robert

To: Ramsey Su who wrote (7487)	1/6/1999 4:51:00 PM
From: Gerry Petencin	Respond to of 10921

Ramsey, What will pop this bubble? Greenspan, inflation fears, interest rate hike, bad earnings reports well below the 21% growth rate you mention. Fundamentals always prevail, a PE of 50 means a 2% earnings return on the market cap, even a compound earnings growth of 21% annually needs 3.5 years to reduce that PE to a still high 25. I'm trying to convince myself to sell some of the amat,lrcx,helx, and klic that I bought when BLOOD was in the streets. Somebody please HELP me, I hate to sell stocks, but I think I really need to this time. And then what? My only bet is to buy some nice oil related stuff and wait the 1 day to 5 years for oil to head up again. Or maybe a few select techs. Good luck, Gerry