Fleck interview:
Started off talking about comparisons to the 20's, same infatuation w/technology, same hyperbolic rhetoric re: new Era's, etc. Notes that valuations are higher now than in the 20's.
"People are whistling past the graveyard in their attempts to ignore MSFT". MSFT hurt by decreased corporate demand for hardware (due to overpurchase by cos. for Y2K). Sellers to the corporate sector ALL have a problem (that has been ignored by the market, by and large).
"I don't think the market can peter out. This is a bubble. Unfortunately, bubbles end very badly. You can focus on it and try to get ready for it, or you can get buried by it."
He predicts that the catalyst for the sell off will be...
(commercial break)....
Question re: valuation. Discussed the disconnect between price of Dell and its valuation. Notes that when the mismatch is recognized, prices suddenly crater.
Question re: how he's made money in the mania. Said its very difficult, since companies are not being valued on their fundamentals.
Question re: what will bring about the decline. Says he doesn't know, but we'll see a panic liquidation at the end of the 1st phase. "Even if we drop 10-15%, stocks will not be cheap". "The stock market has become the economy", there's a record high relationship between stock valuations and GDP, and if market craters, it will inevitably bring the economy down with it. |
