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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: JRI who wrote (4908)	3/16/1999 4:59:00 PM
From: 911Turbo	Respond to of 17183

john- excellent point, and this is also the argument that helps me hang on to dell and other quality big tech. 9

To: JRI who wrote (4908)	3/16/1999 5:13:00 PM
From: WTSherman	Read Replies (4) \| Respond to of 17183

<actually, forward PE are a better place to start...< John, I wouldn't begin to argue regarding the relative merits of Dell,CSCO and EMC. All three are overvalued by any stretch of the imagination. I put MSFT into a separate category because they have a near monopoly position and a margin structure that cannot be compared with co's that are basically h/w oriented. I do think that there is a huge amount of self-delusion going on with these stocks and EMC is getting close to the point that DELL and CSCO have already reached(namely, over extended). FWIW, using forward P/E is generally not a very good place to start since forward P/E is nothing more than an estimate based upon a variety of factors which may change. It is not a fact. Trailing P/E is the number that should be compared with growth. Otherwise you are double factoring in growth(if you use forward P/E and then divide by growth you are counting this year's growth twice). My feeling is that EMC is the perfect example of the narrowing of the market and that this type of multiple is absolutely and completely unsustainable by EMC or by any of the others in this lofty category. BTW, none of this is a criticism of the company or its prospects. They are a dynamo, its just that this is now at a silly level...