Work this through with me... people of common sense.
The high multiples awarded many technology stocks were based on growth of unforseen dimension and potential. Nobody wanted to be left out. Internet and computer companies were growing at 100's of percent in year to year (often quarter to quarter) growth. The PE ratios could be out of whack because nobody knew how far (behind the curve) was reasonable. Now we are seeing things a little more clearly. The future is still relatively unknown but the triple digit short term growth rates are slowing. The exponential feeders that perpetuated some of the growth is slowly being plugged. For example (A&B for computers and C&D for Internet):
A) School systems and public libraries have taken care of some accessibilities, while corporate entities and structures have fulfilled others.
B) Many individual acquisitions leave people amply satisfied with the capabilities they have and there isn't the urgency for upgrades... even while the untapped population is added.
C) Internet pay-for-views are increasing and competing for dollars already placed somewhere in the entertainment and information aspect of our lives.
D) Marketing dollars are competing with old media forces and more and more are finding there aren't enough dollars to spread around.
I could go on and on, but you get the drift. Yahoo is a leading example. Here is a company that was projecting phenomenal year over year growth, yet is expecting to earn less this year than last. Growth measurement is no longer in the multiple 100's % by sheer size and competing factors. So with all this said, I leave this one very simple question: How long will the market sustain the high multiples awarded to many of these stocks in the technology field?
Isn't it reasonable to see further correction, i.e. either minimal upward stock movement to catch up with current pricing, or, further pull back.
Come on people... I know you have opinions on this.
D'Bear
AI
