Baidu Bubble

My close friend, Dale, wrote me the following: "This may be the best buy since Linux went public and immediately soared to $320 per share. It`s a bit lower now, at $1.75, but think what you could have made had you bought early!" As you may gather from this, he and I have a similar sense of humor.

Baidu, the Chinese Internet search engine, has joined Google in the stratosphere of the 2005 stock market. (To be fair, Google has a P/E ratio of about 100, which may be speculative, but is not even close to Baidu's altitude.) I think Dale also mentioned that it has a P/E ratio of 2800. At least it has a P/E ratio. Back in the Halcyon days of the Great Internet Bubble, having a positive E was almost a sign of being too old fashioned.

Today was another of those "sucker rally" days, by the way. Should see some pretty good volatility for the rest of August and into September. September is likely to be a rather unpleasant month for longs. We'll see.