Comments on: Chart of the day: Techs vs industrials http://blogs.reuters.com/felix-salmon/2011/07/22/chart-of-the-day-techs-vs-industrials/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: ErikD http://blogs.reuters.com/felix-salmon/2011/07/22/chart-of-the-day-techs-vs-industrials/comment-page-1/#comment-28893 Mon, 25 Jul 2011 08:21:06 +0000 http://blogs.reuters.com/felix-salmon/?p=9076#comment-28893 I believe the gap can at least be partly explained by the fact that execs in the tech sector spend so much time going to hipster conferences (SXSW!) and otherwise acting like cliquey high-school kids, while their counterparts in the industrial sector are at the office making sure their companies are actually selling stuff at a profit. And no, I’m not kidding.

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By: TurtleBay http://blogs.reuters.com/felix-salmon/2011/07/22/chart-of-the-day-techs-vs-industrials/comment-page-1/#comment-28880 Sun, 24 Jul 2011 13:57:35 +0000 http://blogs.reuters.com/felix-salmon/?p=9076#comment-28880 I think that there is a megacap low P/E bias here. Having techs as megacap stocks is a relatively new phenomenon, but Apple, Amazon, Broadcom, HP, Dell, EBay, Microsoft, Google, Cisco, Verizon, AT&T, Oracle and Yahoo are up there in the Russell top 200 stocks. Once a company is a megacap, it becomes very hard to grow since you typically already dominate market share, your products are entering a mature growth phase, and even if you can find millions in new revenues, it is a drop in the bucket. Since the charted P/E average is probably market weighted, these mature companies dominate the tech calculation.

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By: fredmertz http://blogs.reuters.com/felix-salmon/2011/07/22/chart-of-the-day-techs-vs-industrials/comment-page-1/#comment-28873 Sat, 23 Jul 2011 15:20:50 +0000 http://blogs.reuters.com/felix-salmon/?p=9076#comment-28873 Isn’t this exactly what one would expect to see in a deflationary or near deflationary environment?

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By: buysidemetrics http://blogs.reuters.com/felix-salmon/2011/07/22/chart-of-the-day-techs-vs-industrials/comment-page-1/#comment-28855 Fri, 22 Jul 2011 19:40:06 +0000 http://blogs.reuters.com/felix-salmon/?p=9076#comment-28855 Felix, post-96 history isn’t necessarily indicative considering the bubble years’ very high pe ratios for techs. Students of graham/buffett also know, given how volatile tech business is, that tech might command a lower pe ratios than industrials. And yhis isn’t only a graham/warren claim. This is what Bill Gates said back in 1998 (while MSFT was trading at over x30): “I think the multiples of technology stocks should be quite a bit lower than the multiples of stocks like Coke and Gillette, because we are subject to complete changes in the rules. I know very well that in the next ten years, if Microsoft is still a leader, we will have had to weather at least three crises.”

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By: maynardGkeynes http://blogs.reuters.com/felix-salmon/2011/07/22/chart-of-the-day-techs-vs-industrials/comment-page-1/#comment-28854 Fri, 22 Jul 2011 19:32:03 +0000 http://blogs.reuters.com/felix-salmon/?p=9076#comment-28854 BTW, the correct title is “my good friend Larry Summers.” He would like that.

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By: mfw13 http://blogs.reuters.com/felix-salmon/2011/07/22/chart-of-the-day-techs-vs-industrials/comment-page-1/#comment-28851 Fri, 22 Jul 2011 18:39:49 +0000 http://blogs.reuters.com/felix-salmon/?p=9076#comment-28851 I think it may have to do with the fact that technology companies are now viewed as being a lot riskier than they used to be because of the pace at which technology is evolving. Today’s highflier may be obsolete by tomorrow morning…just look at AOL, MySpace, etc.

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By: TFF http://blogs.reuters.com/felix-salmon/2011/07/22/chart-of-the-day-techs-vs-industrials/comment-page-1/#comment-28850 Fri, 22 Jul 2011 18:35:07 +0000 http://blogs.reuters.com/felix-salmon/?p=9076#comment-28850 JasonDick, the big companies (and the bulk of the market cap) are all multinationals. If anything, the industrials are more tightly tied to the US than the tech companies.

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By: http http://blogs.reuters.com/felix-salmon/2011/07/22/chart-of-the-day-techs-vs-industrials/comment-page-1/#comment-28848 Fri, 22 Jul 2011 17:54:54 +0000 http://blogs.reuters.com/felix-salmon/?p=9076#comment-28848 This may be sheer foolishness, but doesn’t this say less about tech than it does about the industrial sector. Industrials have done well over the last decade, but a major military power has been involved in two wars. People may be willing to pay for that sort of demand side certainty.

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By: ReformedBroker http://blogs.reuters.com/felix-salmon/2011/07/22/chart-of-the-day-techs-vs-industrials/comment-page-1/#comment-28847 Fri, 22 Jul 2011 17:44:40 +0000 http://blogs.reuters.com/felix-salmon/?p=9076#comment-28847 as they say – if you torture the data enough, it’ll confess to anything

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By: JasonDick http://blogs.reuters.com/felix-salmon/2011/07/22/chart-of-the-day-techs-vs-industrials/comment-page-1/#comment-28841 Fri, 22 Jul 2011 16:06:55 +0000 http://blogs.reuters.com/felix-salmon/?p=9076#comment-28841 “But there’s definitely an indication here that either industrial earnings are too expensive, or technology earnings are too cheap right now. Or both.”

Why would you think that? It could well be that the US has become less competitive compared to the rest of the world in tech, compared to its competitiveness in industry. This might reflect, for example, the fact that much of the rest of the world has pulled way ahead of the US in education.

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