How low can we go on the Nasdaq?
Well, here's how I look at it :
About 20% (by weight) of the Naz can go down another 90%. These are the RBAKs, the BRCDs, the JNPRs, the QCOMs, the BRCMs etc. of the world. So that contributes to an 18% decline in the entire index.
About 30% of the index can go down another 40%. These are the INTCs, the CSCOs, the MSFTs, the DELLs etc. of the world. That is a decline of 12% for the entire index.
Of the remaining 50%, it could well be a wash, with the losers canceling out a few non-tech stocks that might actually go up a bit. If we assume that the net is a loss for this group too, it is likely to result in the index declining another 5% or 10% at the most, since most of these stocks are the ones that didn't go up a whole lot in the first place (like Staples or Novell) or have been beaten down badly (like Inktomi).
So that leaves us with a decline in the range of 30% to 40% from the present level of 2100. That means the Nasdaq will probably bottom in the 1250 to 1500 range.
All IMHO, of course. |
