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Technology Stocks : America On-Line (AOL)
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To: SpongeBrain who wrote (28130)8/4/1999 4:50:00 PM
From: J Krnjeu  Read Replies (2) of 41369
 
Mr. SpongeBrain,

I believe that the reason the whole market falling is due to the interest rate concern. This has nothing to do with free ISP's or all that other issues being brought up.

Many financial people believe that when interest rates rise it's less rewarding to be in stocks because you can receive a higher return with less risks that stocks pose in other financial instruments.

That's why many high PE stocks suffer when interest rates rise, but most stocks suffer somewhat under a rising interest rate environment.

I believe if we did not have this cloud of rising interest rates hanging over us, the whole stock market would be setting new highs. I feel AOL would be in the $200 area and fund managers would have not sold out their positions to the extent they have.

I also see other fine companies are well off their highs for the year. One company is IBM. Please tell me how the free ISP's will hurt IBM or if their is another reason for their sell off, then please explain that to me.

I also feel that economist such as Mr. Greenspan have a problem with something they don't understand how to evaluate. I believe that Mr. Greenspan had problems with Microsoft evaluations in the 80's as would most economists. The only problem with economics is there has to be a model for everything and if one doesn't exist, then you can't evaluate it. Also, never include people in the basic economic model as they are illogical and will mess up your model.

So in closing, I would hope the stock market continues to rise but in the short term, we are subject to the annual summer sell off and the rising interest rate cloud over us. November, should see us at much higher levels including AOL.

Good luck with all your investments.

Thank You

JK
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