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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (16660)	5/27/1999 10:34:00 AM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 64865

Michael depending which is which there are much to many overpriced stocks in this market in the Internet sector alone AOL included. As to SUNW I am long term follower of this stock. Historicaly it traded at a P/E of around 20 or less as recent at last year. last march it hit $14 on a "SCARE" I remember as I was very long SUNW <GG> at that time. IBM, HWP, CPQ and others have more or less same "upside" potential. But US investors try to be concentrated only on their companies. All high tech companies face stiff competition from Europe and even India, who relative to that part of the world are technological very advanced on par with the US in many fields. As I do belive fact and stock price have very mediocre correlation, I would suggest to superimpose DELL chart with SUNW chart with a time delay of 3 month I think. DELL was also invincible in January. DELL's chart reflect investors perception not reality. BWDIK Haim BTW from my lenghty response you can conclude that I am all in cash now - which is right.

To: The Ox who wrote (16660)	5/27/1999 12:31:00 PM
From: Alok Sinha	Read Replies (2) \| Respond to of 64865

Here is my 2 cents on the current debate about SUN's valuation relative to the market. First, let us not kid ourselves with respect to market valuation levels - by any measure the market valuations are stratospheric (even after this last round of sell-off), and should be cause for concern. IMO, if (and that is a big if) the market is overvalued by 30%, high beta stocks are probably overvalued by more than that. On the other hand, relative to the market levels (and tech stocks in particular) SUN is not very overvalued given its growth outlook and record of stable earnings. Another bad inflation report will most likely knock the wind out of the high flying growth stocks as the Fed will definitely tighten. So irrespective of the fundamentals, that is the biggest concern. The 30 yr bond above 6% makes it very risky for stock for the near term - and that is not as outlandish as it seemed a month ago. Don't get me wrong. I am long SUN (more than prudence would dictate) but cautious to the extent that I sell covered calls and buy puts whenever an irrational jump happens(like yesterday). In fact I have been loading up on a lot os stocks these past days, for the long term (but also buying puts to hedge the risk). What will prevent the bottom from falling out of companies like SUN is that they have assured investors of strong earnings for the next couple of quarters with about 20% rev growth - and that is what investors will pay a premium for. Since the uptick in the long bond started 2 weeks ago, I started warning of a potential market meltdown. Even though it may sound illogical, the yield on the 10 yaer and 30 year bond have a direct effect on high growth, high PE stocks. Regards Alok