Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Erik T who wrote (251)	10/26/2000 12:54:36 PM
From: Erik T	Read Replies (1) of 74559

Tech Stocks Slide Amid Fiber-Optics Gloom By Denise Duclaux NEW YORK (Reuters) - Technology stocks stumbled on Thursday as investors fled the once high-flying fiber-optics sector for the second day and found little shelter in a market pummeled by a poor earnings outlook. ``You have destroyed all the sacred cows,'' said Larry Wachtel, an analyst at Prudential Securities. ``You started with the dot-coms then the PCs then wireless and now it's fiber optics. You have pounded that down, so there is no place to hide.'' While many stocks did show tremendous revenue growth for a couple years, investors started believing that would continue forever. Interesting to read about the market in the late 1920's because people then believed the same thing. So the stock prices get justified by perpetual incredible revenue growth. When that slows, as appears to be happening now, there is a long way for these to fall. So, even though they may still have strong revenue growth, the fact that it is slowing in many sectors makes it hard to justify the high stock prices and therefore many stocks can fall a long way and not recover for a long time despite continued actual growth in their businesses. Erik

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