if that is your stategy, you will be doing a lot of buying. Look, EMC is a great company, but the share valuation will have to come into line with the rest. Their growth rate is decent, but not even close to justify the current price. My target to cover is $40 or less.
Stocks will overshoot in a bear market on the downside as they do in a bull market to the upside.
We are in a bear market. Fed can not stop the cycle from completing.
* But competion will come in 4-5 years easily eroding into EMC's margin
What competition will that be then? Hitachi gave it's best shot with new product and the HP alliance and have gone nowhere, IBM have such confidence in their current product that they didn't even use it in their prestiege effort at the olympics. Compaq are doing the pc server market, but have nothing and no expertise in the unix AS/400 or mainframe markets. Dell will steal market share from Compaq because they only know the same market. NTAP are in a niche.
Some one will do it one day, but the next 5 years are less than likely.
Feel free to believe want you want to believe. It is the USA.
But, I think economics and history don't fit your arguement well. High margin business like EMC's breed competition. Sooner or later, people get "good enough" at a lower price point. It's called capitalism. Industries mature and margins come down. That's why Ford has revenues of 170B but a cap of only 50B. EMC's right now bringing under 10B in revenue commanding a cap of over 150B. Supply/demand and capitalism will bring it in line.
Good luck. Me, I'm holding some beaten down stocks, but mostly bonds (munis, corps) and Treasury STRIPS and a lot of cash in various instruments.
This economy stinks in my opinion. And stocks are not where you want to be when it starts to smell.
you keep talking about PE ratios and market caps- and those are all very important. but you refer to them in today's environment and blanket it out of 10 years.
EMC has been doing this already for over a decade!!! Year in, year out. Recession or no.
that's like saying, in 1998, "Gee, Pets.com has a PE of 190, that's low compared to its' peers". yeah in 1998 it was. In 2001 it seems ridiculous.
EMC is as safe as possible for a high tech growth stock moving forward for a long term. There will be big dips and there will be spikes, there will be splits and there will be aquisitions. So whatever happens this month, this quarter or this year- it's irrelevant to me. I'm in a levels not seen since 1993 and with all of the splits I mean, it's been well worth it planning for retirement.
Where would YOU suggest planting money for 10-20 years? Under your pillow????
I won't keep going back and forth, I appreciate your responding and your even respect your comments. But I leave you with two thoughts:
1. Why would anyone sell before they received their MCDT distribution?
2. If someone really is nervous about a dive to 50 again and can't look along a 10 year horizon, PUT IN STOP LOSSES AND GET SOME SLEEP AT NIGHT>
I don't even understand your logic.
If you're saying EMC's market cap will be in the 800B range in 10 years, I think you're delusional.
Show me the math. I gave you my honest opinion and have posted fact based analysis on this board. I'm still waiting for a bull fundamental arguement.
I'm not a basher. You want me to make you feel better. Ok, EMC's a good investment for a 10 year horizon. That's what a broker or analyst would tell you because 1) commissions and 2) investment banking on the backend. I'm not one of those guys. I'm telling you what I think. If you don't want to listen, fine.
But competion will come in 4-5 years easily eroding into EMC's margin. It will come. No doubt about.
And at it's current price it's counting on 30% growth well, well into the future. Not going to happen.