Not a problem Rande. I enjoy offering a contrarian viewpoint on occasion, and it has been somewhat lonely calling for such a steep Nasdaq selloff.
I will go a bit further to say that I think after capitulation has been reached, we will receive a 5-10% bounce, and then will proceed to trade sideways overall until confidence has been regained. At which point, we will begin to see speculation snowball once again, with another steep correction to consolidate the massive move.
[Not that it matters a whole lot at this point, but I believe we'll see the beginning of the next major bull run in Sept of this year. I don't think the stigma surrounding October will have as much of an effect this year... individual investors are becoming increasing wise to its being a buying opportunity. I think Sept will be the month that big companies start rolling out their 3rd generation equipment, and will likely begin to announce distribution near their respective earnings dates (biotech companies should be much further along in their research as well). I think these factors will act as the catalyst towards another snoballing, speculative tech industry.]
Furthermore, I believe the Dow Jones is becoming increasingly counter-cyclical to the Nasdaq index... as evidenced by today's closing prices. That does not mean that 'old economy' stocks will fall by the wayside as the Nasdaq continues its growth. On the contrary, it means that gains in the Dow will take place during Nasdaq selloffs, and over the long run, the two indexes will continue to go higher, with the Nasdaq outpacing the dow by some factor, simply because of the high growth inherent in most tech companies.
Wild cards here are: the presidential election, the effect of Greenspan's interest rate hikes which really haven't been seen yet on company balance sheets, China (both currency devaluation and military confrontation)... less of a concern: massive earthquakes in either Japan, California or other industrial hotbed (geological catastrophe), world wide epidemic (biological catastrophe; least likely IMO), and lastly: What is up with Russia?
As for myself: I worry about China the most. There is a lot of animosity towards the US for numerous reasons, and I think our prosperity is a major one. Don't think that the powers that be in China wouldn't love to curtail America's economic expansion. If they THINK it's in their best interests... watch out! |
