Even if the company is growing at 30+% there is noway to justify a multiple of 100 especially in the current market environment.
Regarding their claim that storage is immuned to a slowdown .. I disagree.
Storage can handle a slowdown much better then PC's and server market. But if the market keeps slowing eventually storage will also get hit as capital spending $$ eveporate. It takes money and creditto buy emc products. With less pc's being sold, less servers being deployed, more dotcoms going out of business at somepoint companies like EMC will get hit also.
I am not saying that this is a bad company... under current conditions it is one of the best positioned... but the current valuations of the stock is assuming perfect market conditions for emc's products and that maynot be true.
Look for the multiples to shrink some before stocks find a bottom. $55-60 level has good support
I disagree. I don't think them ignorant, just brainwashed. All euphorias happen the same way. We wouldn't have this bubble without it. The following of the masses. If everyone says its OK then believe it. Only positive news is ever heard. Thats human nature. There seems to be a vast distinction in believing that the glass is half full when in reality the glass is only a three dimensional hologram. Puff, all gone. Smoke and mirrors.
I disagree that the current growth rate is not enough to sustain a P/E of 100. S&P claims that with a PEG of 2.3, while the market as a whole has a PEG of 2.2, that EMC is NOT trading to a premium to the overall market.
Look at CMVT, one of the best Nasdaq companies, which grows at 30% per year, and always carries a high PE. (Currently 84)
short we know. BTW, for a guy who thinks he's so "logical." Since NO ONE can predict stock movements. Why do you short? Short term it is is a 50/50 winner and in the longterm the advantages are with the market(longs). Why not buy proven blue chip winners and hold. Especially after a market that has been cut in half? Why do you go against the odds? Please don't tell me your not short!