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Strategies & Market Trends : Rande Is . . . HOME
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To: xcr600 who wrote (17896)1/4/2000 10:16:00 PM
From: KevinThompson  Read Replies (2) of 57584
 
Notes from Briefing.com:

The Disconnect Is Coming Home
This is more likely the reason for Tuesday's declines.

Many of the highest flying stocks in the market simply became disconnected. At Briefing.com, we use this term when a stock begins to trade out-of-sync with developments in its underlying business model.

With a disconnected stock, trading is dominated more by supply and demand than a valuation of the underlying business. As long as prices keep going up, there are plenty of buyers.

But stock valuations eventually come home to the value of what a long term holder is willing to pay for the stock. With so many stocks having become disconnected, particularly in the Nasdaq, it may simply be that the ultimate buyers aren't willing to pay as much as the temporary buyers. As the temporary traders leave positions, only the ultimate buyers are left.

And they pay less.


KT
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