In prior downturns, particularly in technology stocks, whenever business has bottomed out, it has been an opportune time to jump back in. But things haven't changed so much: The market runup is overdone. There will be a correction shortly, and it could be very severe.ON VALUATIONS
People are closing their eyes and buying without regard to valuation. They haven't learned anything from the bubble. Broadcom Corp. (BRCM
) has gone from $150 to $40, but it's trading at 14.3 times revenues. Anytime you get above five or six times revenues, it starts getting risky--unless you have a bulletproof franchise, such as Microsoft Corp. (MSFT
) or IBM (IBM
). Investors have got to do the math.