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subu76
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Quote subu76 Replybullet Posted: 16/Sep/2009 at 12:14pm
One bubble prediction that was proved wrong....A 2005 article
 
Google shares are a bubble waiting to pop ... as it was selling at 25X revenues.
 
Google has doubled since then.
However it's revenues grew 7 times in the meantime.
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subu76
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Quote subu76 Replybullet Posted: 16/Sep/2009 at 12:24pm

Interview of a value fund manager who got fired during the dot com bubble Points to the kind of pressures faced by institutional investors

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subu76
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Quote subu76 Replybullet Posted: 24/Dec/2009 at 11:04am
The woes of buying an IPO during a bubble.
 
Sycamore Networks
 
Jan 2000 - Market cap on the dayof IPO = 15 billion
 
Market cap today - 600 million.
 
After 10 years the company is at 4% of it's IPO day market cap.
And this is a clean company...they just listed at an opportune time.
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basant
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Quote basant Replybullet Posted: 25/Dec/2009 at 12:12pm
Promoter is the brother in law of Nr Nayan MurthyOuch
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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subu76
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Quote subu76 Replybullet Posted: 25/Dec/2009 at 2:37pm
Also, one of his other companies.... Tejas Networks will probabily get listed in India sometime.... I am sure he used to have a big stake in this one.
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hit2710
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Quote hit2710 Replybullet Posted: 25/Dec/2009 at 6:27pm
Any idea on how to detect bubbles which are forming in a particular sector/stock?

I had the feeling that some sort of bubble was forming in the stock of educomp when it was quoting at around 1000 and was at around 40-50 times discounting, and still people were justifying the price quoting the immense opportunities in the education sector and other positives.

Another bubble which could be in its infancy phase seems to be the power generation stories where almost every steel company wants to generate power and besides these there are huge ipos coming in to tap public money for setting up thousands of megawatts of power capacities. This story has a long way to go before it assumes bubble proportions but has to be kept in mind. The rush of IPOs from such companies reminds me of the rush of IPOs from property/real estate stocks some time back and now very few people want to own real estate stocks which are still way below their all time highs.
Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
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abhishekbasu
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Quote abhishekbasu Replybullet Posted: 25/Dec/2009 at 7:22pm
Perhaps, one of the best texts on bubbles is available in Charles Mackay's popular book Extraordinary Popular Delusions and the Madness of Crowds.

But, typically a bubble is for a group of stocks or the market in whole. Movement of prices of any one stock is usually not termed as a bubble. That is typically a valuation issue.

Originally posted by hit2710

Any idea on how to detect bubbles which are forming in a particular sector/stock?

I had the feeling that some sort of bubble was forming in the stock of educomp when it was quoting at around 1000 and was at around 40-50 times discounting, and still people were justifying the price quoting the immense opportunities in the education sector and other positives.

Another bubble which could be in its infancy phase seems to be the power generation stories where almost every steel company wants to generate power and besides these there are huge ipos coming in to tap public money for setting up thousands of megawatts of power capacities. This story has a long way to go before it assumes bubble proportions but has to be kept in mind. The rush of IPOs from such companies reminds me of the rush of IPOs from property/real estate stocks some time back and now very few people want to own real estate stocks which are still way below their all time highs.

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subu76
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Quote subu76 Replybullet Posted: 25/Dec/2009 at 7:52pm
Originally posted by hit2710

Another bubble which could be in its infancy phase seems to be the power generation stories where almost every steel company wants to generate power and besides these there are huge ipos coming in to tap public money for setting up thousands of megawatts of power capacities.
 
I can't agree more.
 
I think most companies which have production start dates 3-4 years from now will experience much lower stock prices during a correction.
 
But then who is to say the prices will not double somewhere in the middleSmile
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