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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (92193)	1/28/1999 12:55:00 PM
From: arthur pritchard	Read Replies (1) \| Respond to of 176387

Chuzz:<morsels> Just read your post. Now can't leave for breakfast.

To: Chuzzlewit who wrote (92193)	1/28/1999 1:08:00 PM
From: JRI	Read Replies (1) \| Respond to of 176387

Chuzz- I agree with your concern(s)...my point is not that the market is, somehow, permanently insulated here..not at all....but that perhaps now (let's take the S&P 500) would go from a mean 31 PE to an 18 PE......however, in the past, the PE number may have been 20 to 10 respectively... Note that the NEW low PE is almost as high as the OLD high PE.... Possible? I think so... So, in other words, this liquidity has put a "floor" on the market...IMO, it would take a prolonged recession, not just one quarter or two, to drive a stake thru the heart (morbid) of the stock-crazed individual investor.......It will take a severe economic downturn to kill the "buy the dips" theory........look, who panicked (primarily) in October...the pros! At least as much as individuals.. I certainly feel that many investors (rightly or wrongly) feel empowered by surviving what happened last October...and like the child playing with matches...will not get scared until they really get burned.... So, given that many of us are long-term holders here, maybe the real question is: When is the next recession (or higher interest rates) coming? Fortunately, I don't see one in the near future.... What else is (for a long period of time) going to take this market down (and keep it there)...and take massive flows of liquidity out? BTW- An economic slow-down would probably have a chilling effect on the IPO market, but would (also) probably slow down the current acquistion craze...so I'm unsure how it would effect overall stock supply...

To: Chuzzlewit who wrote (92193)	1/28/1999 1:32:00 PM
From: JRI	Read Replies (1) \| Respond to of 176387

One last point Chuzz: From time to time, I invest in companies based overseas or in overseas market indexs.....although, right now, there are many companies selling at below book value, and 2/3 times cash flow....I can not bring myself to buy (right now) because of how emerging markets have fallen "out of favor", and the credible accounting statements, etc... In other words, on an individual basis, I can see how some stocks (Cisco, Dell...in my case) can attract funds that would otherwise go elsewhere..in my case, due to little other than the fact than that I am familiar with these investments (and how they report) and feel good about their long-term prospects....an 85 PE vs. a 90 PE is not so much the issue... I think, additionally, that the market (as a whole) to some extent reacts this way...so, although I know classical theory (correctly) uses as a basis the risk-free rate of return....I believe that the "classical" relationship is skewed due to factors such as the one I mentioned.. Doncha think? So, my desire is to attempt to figure out to what extent the market (and individual stocks) are skewed due to the factors (such as what I mentioned in this post and last).. And that's what I mean by cash-flow projections affecting stocks on a relative basis (and not an absolute basis)...for example, perhaps on a classical, "pure" valuation basis, Dell only should receive a 75PE, or 40 PEG..but, because (one factor, for example) of investors penchent for index funds.... mutual funds managers are buying more Dell (and less small-caps) for their portfolios..maybe because Dell is more liquid...who knows..but classical theory would state they should buy the small cap...but they can't (or wont).... My point (again) being, that the mutual fund manager's decision...like mine....has to do not only with classical valuation...but also with other factors that affect investing... Maybe this is what "premiums" are all about...Do you believe in premiums? How does one measure a stock's premium? Sorry for the rambling..look forward to your response...