Alan Brochstein

Big Debt and Big Returns Could Be Spurring This Rally

I agree - CIEN isn't a dog relative to the others mentioned...

Big Debt and Big Returns Could Be Spurring This Rally

While I am not to sure I agree with you, I am more sure that your comment will provoke lots of disagreement. BAC could have the rosy future you depict, or it could end up being diluted away. That CEO you cite might not be there before this crisis ends.


On Mar 30 04:25 AM balabanovj wrote:

> Debt/equity ratios are but one measure. In general, Alan is right,
> but in the case for example of Bank of America, we're all pretty
> sure how the story is going to end. It might take a few years, but
> BAC is going to extinguish it's TARP debt in the next 12-18 months
> as per it's CEO, and from there, at least if we are in the midst
> of an economic recovery, it's clear sailing and BAC will once again
> be an enormously profitable company- even moreso this time with it's
> ML investment arm which will add revenue through brokerage and IB,
> and Country Wide to take advantage of the real estate recovery. My
> prediction is that CW will eventially be spun off after BAC has milked
> the recovery out of them. BAC though, will return relatively quickly
> to EPS levels of at least $5-6/shr and a $50 share price.
>
> JBB

Tech May Be a Wreck, But This Isn't 2001

Thanks User 138602. I don't have an opinion on YHOO that is informed at all. I surely wouldn't want to own it if success depends upon being acquired. By many metrics (beyond PE), the stock looks very inexpensive, not surprisingly.

Tech May Be a Wreck, But This Isn't 2001

The hand, thanks for your comments. You make an excellent point - the industry is more mature indeed. I think it is a pretty bad industry quite frankly - way too much competition in many segments (semiconductors come to mind). I have just started warming up, having maintained zero or relatively low exposure for the past 15 months. One of the nice things about a recession is that it eliminates some of the weaker competitors, a process that allows the "survivors" to capture more share when the market resumes its growth. While I question the innovation at MSFT, many of the others in the large-cap Tech space will no doubt be selling things tomorrow that are quite different from today.

Tech May Be a Wreck, But This Isn't 2001

Thanks, Dr. O. I surely appreciate your point and believe it is mainly priced in, but, as you say "no one knows", certainly not me. An interesting aspect of technology is that it theoretically allows a company to "do more with less". To that extent, tech companies might surprise us.