Back to lower grounds for AAPL

Despite all the hype about Macworld on Tuesday, AAPL lacked enough punch to stay afloat at the ethereal levels it reached last year. As guessed earlier in the year, these technology darlings will find it difficult to meet sky-high expectations and retain sky-high valuations in such a pessimistic market. AAPL might look attractive considering its 21% off its highs, but take a look at the P/E - 43! With a 24 bn revenue on high-end consumer electronics and a revenue CAGR of 33% over the last 5 years, it has sutained its run based on the huge margins from ipods, iphones and such stellar hits. Hats off to Steve Jobs for his audacity, vision and zeal. However, you cannot have an ipod or an iphone every year - the wafer thin PC does look pretty, but probably that's not enough to keep driving current valuations in these market conditions.

Same applies to GOOG....even MSFT, ORCL. My guess is we will see some corrections in these stellar names over the coming year. Meanwhile, ORCL's acquisition of BEAS is indeed notable. With its portfolio of acquisitions including Peoplesoft & JD Edwards (ERP/SCM) , Siebel (CRM), Hyperion (BI/Reporting), IFlex (Fin Serv solutions), BEAS (middleware/app servers), Larry has a very well rounded set of assets for ORCL, fitting it firmly against MSFT and IBM.

The above trend also means we would probably see more acquisitions of meaty stand-alone players in other areas too - like TIBX, WBSN, CTXS etc. Why not JAVA? In a beaten market, the Larrys of the world with big money will still look for value plays and acquisitions. Which means 'there's always a bull market some where out there'! (Trade mark rights for that with Jim Cramer of course!)