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Technology Stocks : Oracle Corporation (ORCL)
ORCL 178.45-5.4%Dec 17 3:59 PM EST
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To: Greg Jung who wrote (13027)1/11/2000 2:51:00 PM
From: MeDroogies  Read Replies (1) of 19080
 
Greg...it isn't "my" scaling....it's a LAW and a well defined law at that.
Our current mania only began in earnest a year and a half ago. It is in the early stages. If you check typical manias w/in the market regarding particular sectors, you'll find some that lasted for up to 8 years.

I don't disagree with the fact that the "new" paradigm isn't anything...but there is truth that the current valuations are justified - just not for reasons that match the past or will even make sense in the future.
If you have studied anything involving "phase transitions" (water turning to ice, for example) you'll find that there are stages at which certain things are not explainable using definitions that match previous or future phases. We are currently at a juncture not unlike that. You should embrace it, but not believe that it will last forever (as some maniacs think). If you do, you'll make more money and be able to know when to get out.
The AOL point is a turning point. The market is due for one last full blast, which is likely to run until August. At that point, I'd be willing to bet there will be a retrenchment.
That said, remember that we are also in a very healthy economy, chock full of ESOPs and 401(k)s. It is possible that the current valuations WON'T collapse, but slowly leak. I would say a collapse is only imminent once unemployment hits 6%. At that point, people will draw down on stocks to supplement unemployment insurance/401(k)s won't be as well funded/a budget deficit will begin to develop again due to increased gov't expenditures.
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