Irrational exuberance

Scott McNealy in 1990 to those who bought Sun at 10x revenues: "“At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I have zero cost of goods sold, which is very hard. That assumes zero expenses, which is really hard. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Do you realize how ridiculous those basic assumptions are? What were you thinking?”

Excerpt From

“If It Walks Like a Bubble and Quacks Like a Bubble, Then It’s Probably a Bubble”

Andy Serwer in Barron’s