I think what's happening is that the money flows are strong like they have been over the past 5 years, but instead of going to all sectors, they have been focused solely on the tech sector, which is why you see these crazy moves upward. Also, when the so-called old economy stocks start coming back, the tech stocks will look less attractive, since right now, I think a lot of these funds are heavily overweight tech and if we see one of those August '99 corrections, a lot of them will be scared back into the old economy stocks.
And, to quote Jonathan Hoenig of thestreet.com, "A lot of these tech stocks are like women, the better you get to know them, the less you like them." :) I don't think the Street really knows what these companies can really do, as far as profitability is concerned.
As for the early retirement of baby boomers hitting it big with their momentum tech investing, I don't believe it will be signficant because these are the greediest type of trader out there. They aren't satisfied with their 200% YTD returns, they want more. Its these momos who ride these stocks up who will likely ride them down, thinking that all down moves are just dips. I guess they never saw charts of ETYS or RHAT or VUSA or even AMZN over the last year. |
