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Technology Stocks : All About Sun Microsystems
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To: JC Jaros who wrote (18470)8/5/1999 12:09:00 PM
From: Alok Sinha  Read Replies (1) of 64865
 
JC,
The bigger picture that you are missing is valuation levels. The economic / financial scene going forward is "materially" different at inflation of 4% and 30 yr bond at 6.5% relative to inflation 2% / bond at 3.25%. Also past experience (50+years) with inflation shows that it is not an on-off switch. So if a numeber of indicators point to an uptick in inflation - more than likely it is not an anomaly in data. This is, IMO, the reason, why the long bond has stubbornly resisted going down below the 6% level even when some data showing moderate inflation were released in the last couple of weeks. The market's rise in recent times has largely been driven by momentum, short term traders and not by fundamentals. Any time there is excessive rationalization by analysts where you ignore decades of history with the "new paradigm" arguments - it is risky.

Regards

Alok
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