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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 243.08

-2.9%

Nov 6 3:59 PM EST

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To: GST who wrote (113951)	1/2/2001 7:03:59 PM
From: craig crawford	Read Replies (1) of 164684

You can't have it both ways GST. On the one hand you say that there is this terrible recession coming down the pike and companies like YHOO are going to barely make any money or even have losses. Then you claim that it's really not bad out there so Greenspan has no need to cut rates anytime soon to help the market. You can't make the argument that we are headed for a recession and at the same time make an argument that Greenspan shouldn't do anything about it. >> A Naz stabilizing around 2000 might be just what AG is looking for. << Markets don't just sit still though. What's wrong with a rally to 3000 or 3500 and then a trading range between 2500 and 3500 for a couple of years? Why can't the Nasdaq rally to 3000 and then fall back to 2000? Better yet, why not a Nasdaq rally with some reasonably priced rebounds in large cap tech while the Nasdaq averages don't move up so much because the JNPR's and the BRCD's and the CIEN's of the world come down in price? That is what I would truly like to see. Stocks like INTC and AMAT and SUNW and CSCO not making new highs or anything, but rebounding a bit while all 100 dollar stocks and all stocks with PE's above 100 get kicked in the teeth some more. JDSU is still selling almost 19 times sales, even after the huge decline. SUNW is trading at 4 1/2 times sales. I would like to see SUNW trade at 6-7 times sales and JDSU trade more like 10 times sales. Let's see SUNW bounce 35-40% and JDSU drop in half, and not see the Nasdaq average show much gains overall. Let's see AMAT tack on 30-40%, and see 5 more junky IPO's go out of business and keep the Nasdaq average from going sky high. Let's see YHOO bounce to 40, but then watch 5 or 10 more internet firms get delisted and go to zero. That is how you can have a bounce in the big caps that will survive this without a major move in the averages. (I realize that the Naz is cap weighted so I'm taking that into account). I really don't think the market will go back to bubble mode if Greenspan cuts rates. It is not a straight shot to 5000 when he cuts. So making the argument that Greenspan shouldn't cut rates quickly because everyone will go on full margin and bid up bubble stocks again is absurd. The type of people who went balls out on full margin are the ones who are dead broke now and suffering margin calls. They don't have any money left to bid up stocks. Greenspan cutting rates 50 basis points is not going to give the average Joe Blow any more money to go bid up BRCD. It will ease the credit crunch so business can move along. It will not magically bring back internet firms from the dead. Bad business models are not repaired by a 1/2 point cut. Good businesses that need stable borrowing will be bailed out. The people with all the money are the ones who have diversified into old economy stocks. They are the ones who still have their money to play with, and they are not the type that recklessly buy BRCD up 20 so they can sell it up 30. I think the Naz will have a really tough time at 3500, which is still over 30% off it's highs. So I don't think Greenspan has any worry about re-inflating the bubble. How do you reinflate a bubble that has popped? You can't. You have to blow a brand new bubble. I think with the amount of pain people have just gone through that it will be a long time before anymore bubbles get blown. The bubble that we experienced in '99 and early '00 really got out of hand when the Johnny Come Latelys of the world saw that they were missing out on this money making machine and scraped up all their cash and threw it blindly at the market. How many of those people do you know that are still standing? I think most of them are broke and don't want to even hear about the market anymore. The people who are still playing in this market are people that know a thing or two and will survive this downturn. They are the types that are not going to be sending VERT, INSP, CMGI, and ICGE back to 150.

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