security, encryption, and healthcare

[Mike Schwartz]

On 3/1/07, Joseph Sinclair <plug-discussion at stcaz.net> wrote:
>
> Joshua Zeidner wrote:
> > On 2/28/07, Joseph Sinclair <plug-discussion at stcaz.net> wrote:
> >
> >> As far as bubbles go, energy is a good current candidate, as is
> materials science.  It may >be another year or so before the next bubble is
> really clear, but it probably won't be >healthcare, that's more likely to
> hit in 2017, if ever.
> >
> >   Joseph,
> >
> >    Just curious, what indicators are you going by?  Remember that
> > bubbles do not form based on their actual value to society, its based
> > on financial performance.  As soon as enough money goes into something
> > it literally runs on its own momentum( case in point: Google[1] ).  At
> > this point, I can't think of any space-age materials that are making
> > people millionaires.  Energy may be a possibility, but energy is
> > really a commodity, and as such is not really subject to bubble
> > behavior because it is not easy for people to throw the system out of
> > whack.
> ---
> Bubbles actually have nothing to do with money, they're about emotions and
> herd behavior, the internet had very little money in it when the last bubble
> began, it was the *perception* of "Dot Com" companies as growth
> opportunities that drove the frenzy.
>
> Energy in terms of, primarily, renewables and related
> technologies.  Energy itself is a commodity, the technology to produce it
> most certainly is not.
> Materials in terms, primarily, of nano-materials (nanotubes, quantum dots,
> etc...).
> Both are possible nascent bubbles because investors (esp. VC) see them as
> areas with high growth potential, and they are both technology areas where a
> lot of basic research has been done, but relatively little applications
> research has been completed.
>
> In any case, my primary point, that healthcare is unlikely to be the next
> bubble, is based on the simple fact that nothing spectacular is happening in
> healthcare right now, it's growing, sure, but nothing that will grab the
> public imagination, just more and more "treatments" designed to avoid
> actually *curing* anything.
>
> BTW, there are quite a few millionaires being made from materials
> technology, look at Konarka or Nanosys for just a couple of examples (both
> are active in solar nanomaterials, crossing both energy and materials
> sectors).
>
> >
> >   I am curious to hear your thoughts.
> >
> >  -jmz
> >
> > [1] remember that Google's primary( perhaps singular ) source of
> > revenue are those silly little ads on the bottom of blogs.  click
> > click!
> ---
> Google actually is trading at a very reasonable price premium for a
> technology company (38,45 P/E, compare to Amazon at 53,86 P/E), those "silly
> little click ads" generated 3.2 billion USD in revenue last quarter (10.6for the year) with over 30% margin (compare to <5% for Amazon with roughly
> the same gross revenue).
> (disclosure, Google is my current employer, their financials, however, are
> available from any investment site and it is that information alone upon
> which the above is based)
>
> >
> > ( 602 ) 490 8006
> > jjzeidner at gmail.com
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Just to help clarify those P/E ratios, for those of us who might not be
accustomed to the British (or, Euro) custom of using a comma as the
decimal point:

> Google actually is trading at [...] (38,45 P/E, compare to Amazon at 53,86
P/E)[...]

Those numbers would be represented as "38.45" and "53.86" by
some folks with slightly different customs...  like, US customs.

By the way: someone [else] had said:

> As soon as enough money goes into something
> it literally runs on its own momentum( case in point: Google[1] ).

I think a better "case in point" would be [about a decade ago], Yahoo.
I thought their stock was overpriced with a P/E in the high triple digits.
I finally did sell short around the end of 1999 (right before "Y2K")
   when it (the P/E) was over 1000.
At today's prices, I think yahoo (like google) has a P/E that, while it
might be kinda high, is sorta reasonable.
Both Google and Yahoo do have some mighty smart people.
like their founders.
-- 
Mike Schwartz
Glendale  AZ
schwartz at acm.org
Mike.L.Schwartz at gmail.com
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