After the 2000 Nasdaq bubble, time for the 2010 Nasdaq bubble

Just a reminder of how much markets can be short sighted and have little memory, here's a two year chart of the Nasdaq Composite, courtesy of Yahoo!

Now, let's look at the star of the day, Baidu (BIDU) which literally took off today (+14%) to yet a new all time high, on supposedly unbelievable earnings:

U.S.-traded shares climb more than $88, or more than 14%, to $710.75 Thursday after it reported a first-quarter profit that rose 165% from a year ago. Baidu said it earned $70.4 million, or $2.02 a share, on revenue of $189.6 million.

Let's do some basic maths about BIDU (market cap $24 billion): supposing that every quarter is as good as this record high quarter, we get an EPS of about 8$ (4 times $2.02). So we get a PER 90. Yes, 90.

It means if the profits rise another 100%, we get a PER of 45. And then, another 100% to get a PER of 22.

One can wonder also how reliable and accurate are those earnings, given that they are coming from China, and that the shares do not have any dividends attached...

Wait and see, but I wouldn't be surprised if the it visits the low $100 again...

DISCLOSURE: I'm short BIDU and took a lot of pain today!! :-)