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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 244.41+0.6%Nov 7 9:30 AM EST
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To: Danny who wrote (110434)10/13/2000 2:36:21 PM
From: Eric Wells  Read Replies (3) of 164684
 
Let's be realistic! NASDAQ at 2500?

Danny - don't lose sight of the fact that on Oct 13, 1999, the Nasdaq closed at 2801. With the Nasdaq currently at 3230, that's about a 15% gain for a 12 month period - which is actually pretty high by historical standards. The last time the Nasdaq traded around 2500 was on August 9, 1999. If we were to drop to 2500, that would represent a 12 month decline of around 11% - which again by historical standards is not unheard of.

What is unheard of is the market gaining 80% in a year. The fact that we are at 3200 now actually seems almost "normal" to me by historical standards. And if we were to drop to 2500, I would consider that "normal" as well.

Don't let your thinking on the market get clouded by what happened between Oct. 1999 and March 2000 - those six months were an anomaly - something that we are not likely to see, and hopefully will not see, again (at least not for a while).

What concerns me at the moment is that there still are many stocks that I consider over-valued by historical standards of valuation. I also see the threat of inflation and the threat of international instability. And with all this, we are still up 15% over the past 12 months. At most other points in history, we wouldn't be up 15% - we'd likely be flat or down - perhaps down 11% to 2500. But don't tell this to the New Econ guys - because they'll tell you things are different this time.

Thanks,
-Eric
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