"There may be a mild increase in revenues -- perhaps 5 percent or 10 percent," he says. "But the serious earnings growth will come from those companies who can cut 10 percent to 15 percent from their costs, possibly after having done as much in 2001."
He points to companies like Dutch chip-equipment maker ASML and Philips Electronics, which have already indicated that they will be making further cuts.
Few investors will forget the losses they suffered in the technology crash during the spring of 2000. The trouble is, they also remember the huge profits that were made, albeit briefly, in the year preceding that. No one wants to miss out on the boom this time around. That is encouraging investors to ignore high valuations in their search for the winning companies. This time around, the rally may be sustainable -- or it could fizzle out when the bad news returns.
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