energyplay, RE: NDX
Respectfully (and without malice), I think that you are wrong about certain aspects of the NDX.
1. EXDS and ATHM have already been kicked out. The replacements are two dynamic (though overvalued) biotech stocks.
2. Even before the departure of EXDS and ATHM, remember that the bottom quartile of the NDX represented only about 3.8% of the value of the 100 shares total index.
3. Other members of the bottom half of the NDX may well be “kicked out” in the December 2001 rebalancing. There are scores of multi-billion dollar market capitalization stocks to replace crap like CMGI, XOXO, BVSN, AMZN, YHOO, etc.
4. The future of the NDX will be driven by the results of MSFT, INTC, QCOM, DELL, AMGN, BGEN, CSCO and ORCL. These stocks represent over 35% of the value of the NDX. They may also be among the first to rebound when the impact of huge new monetary and fiscal stimuli are felt.
5. A level of 1000 on the NDX will equate to a price of 25 on QQQ.
In the interest of disclosure, let it be known that I write puts on the Cubes and have used the proceeds of these puts to buy Jan’03 LEAPS on QQQ. However, my business partner (and posters here such as Kb) agree with your assessment of the future direction of the NDX….. |
