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

To: WTSherman who wrote (4912)	3/16/1999 6:07:00 PM
From: Tony Viola	Read Replies (3) \| Respond to of 17183

WTS, >>>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.<<< Would you care to discuss the valuation of: Yahoo, Amazon.com, Ebay, Lycos and countless others that have PEs that are in the thousands or non-existent? Why do you people have to come into threads and lecture how the local stock is overpriced like so many nannies telling us to look both ways before crossing the street? We know, we know. We're big boys and girls now and can take the consequences if "sanity" takes over the markets. Tony

To: WTSherman who wrote (4912)	3/16/1999 6:46:00 PM
From: t36	Respond to of 17183

i was listening to bloomerg station this afternoon and they were interveiwing an analyst..when asked about the narrow breath of the market and what to do..his answer was so BUY those stocks that are moving ...whether you think emc's p/e is too lofty or the stock is too overpriced..thats where people are putting their money..at least you know the company has a quality managment team,leadership position in their sector, earnings you can count on, and solid growth going forward..why not put your money into this stock???

To: WTSherman who wrote (4912)	3/16/1999 6:50:00 PM
From: JRI	Respond to of 17183

OT Well, it looks like we have a different approach to investing and valuation, so I'll spare us the long debate and wish you luck with your investments.. I can't help but ask ....if we aren't buying future earnings (cash flow)..what are we buying? (With our investment dollars) Past history? Knowing about a company's past (earnings) history, as I see it, is only valuable in so far as it helps you to determine (however you do) what a company's earnings/free cash flow will be the future...Of course, it is not a fact (what these future earnings will be...even Warren Buffett would tell you that)....If it were a fact, no need for investment threads, IMO. Also, even looking at past PE's (including growth rates)...Dell, EMC compare very favorably to Coke, Gillete, IBM... I didnt quite get the double-counting issue, but I havent had any coffee this afternoon..so... Anyway, got to run...good luck again..

To: WTSherman who wrote (4912)	3/16/1999 8:53:00 PM
From: Jeng Chiu	Respond to of 17183

Actually, Forward PE should be a key consideration with a few caveats: The Higher the probability of the premise becoming true, the greater relevance the Forward P/E should carry. EMC has not missed earnings for as long as I've owned them (which has been since 1996). They are very conservative with their numbers and usually beats the estimates by a few cents....Therefore, The true PE of EMC is probably lower than the "generally accepted figure" There's an unspoken rule that growth companies do not match the estimates, they must beat them to sustain their lofty valuations. At around $2.00/share the stock is about 59x 1999 earnings. In reality, the $2.00 is probably a conservative estimate. Real earnings are obviously never known until the year after- or ex post facto. Inherent in the price is the assumption that the company will earn more than what is stated (the dreaded whisper numbers). This of course would lower their "real" P/E. And if they do not meet these expectations, the stock will fall accordingly.