GREY:EWDYF - Post by User
Comment by
lamystiqueon Nov 29, 2000 5:37pm
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Post# 2909199
RE: this could get as ugly as Abby
RE: this could get as ugly as AbbyThere are several fundamentally flawed suggestions in this report. One of them is that the stock market in general is overvalued. This is false for several reasons.
1. Much of the high trading prices are due to consolodation of companies;
2. Many sectors are at very good multiples, for instance many oil and gas companies have P/E ratios currently less than 10; many technology sectors are benefitting now from new processes and patents (eg. check out Merix Corporation that expects to generate $400 million per year in revenues). This company is rated as a strong buy by several investment firms; in fact all the technology companies that I have invested in over the last 5 years and still hold, have revenue increases of at least 40 % and many of them are accelerating. One contributing factor also is that the competition in sectors like software, eprocurement, and services is lessing due to many firms becoming unprofitable.
3. Real interests are really quite low if we factor out inflation, which leaves the real interest rate below 5%. So there is plenty of money in the money supply, and the expectation is that interest rates will remain the same for the next while. Energy prices are simply acting like high interest rates, but these high energy prices should benefit companies like edispatch because of the capital costs that can be disbursed to wireless metering and monitoring firms. This also improves the margins of utilities and transportation sector which also reduces the impact of higher energy prices; and
Most good technology firms have patents that legally exclude the competition, so the best place to be is to buy these stocks when the nay sayers say generally bad things about the world economy.
Recessions are often the result of overconsumption and high inventories. A mild recession could be said to exist where the GDP growth on an annualized basis result 2 % or less. We are not even near that and the more technology and process improvements mean that margins will increase, not decrease. A company like Dell reports that future increases in computer sales will decline from 40 to 30 % still mean that the company is going to experience a 30 % increase in sales. Gosh the latest report on fiber optics is amazing. The report by [see 360networks forum] where the increase in fiber will be 300 fold within the next 5-8 years. That is explosive growth. We are in good shape...
If the US dollar falls in comparison to all other currencies this will stimulate foreign consumption of US products and services and will in turn stimulate new stock market activity: buy low and sell high, or buy high and sell high.
So make sure that the company you invest in has lots of blue sky ahead, and of course that will be edispatch, not Sears, nor Walmart, these guys get hit big time when sales drop even as much as 2%...but Walmart is located everywhere.
The future is here...see you at $10
chao,
lamyst