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Technology Stocks : Altaba Inc. (formerly Yahoo)
AABA 19.630.0%Nov 6 4:00 PM EST
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To: FR1 who wrote (26471)3/8/2001 10:25:28 AM
From: Rob S.  Read Replies (3) of 27307
 
I mostly agree with the FED action. The FED pumped up liquidity (lowered interest rates, bailed out impacted financials and pumped green backs into the IMF) to bail out the world economic slump caused by the Asian/Russian/South American debt crisis. This coincided with the intriguing new phenomena of the Internet. Although few analysts or investors had the impact of the Internet figured out, the mantra became "buy techs" including Internut stocks with woefully unproven, if not totally bogus, business models. The artificial pump by the FED combined with Internet inspired speculative craziness sent corporate America and much of the industrialized nations into a corporate buying spree and tech stock buying frenzy. That frenzy, fueled by the utility of the Internet itself (which turned investing into something like "Stock Market Casino Gambling") extracted a terrible price on the workings of the U.S. economy: good "old world economy" companies found it extremely difficult to raise capital because the market ignored them. The divergence between the nifty tech heavy NASDAQ and the broad market grew huge - the largest divergence by far since the NAZ came into being.

No, the downturn in the irrational squandering of capital on anything tech is a marvelous thing for the economy, not a bad thing. A return to rational valuations is never a bad thing. Today, if a company can't make their case for future growth and earnings they deserve to have their heads handed to them. And profitable companies that have long been ignored deserve to have investors notice them. The violence of the adjustment in the historic divergence is upsetting but it is "only normal" in the broad context of the workings of market efficiencies.

I love tech. Tech is the future. But let's try to keep our heads in proximity to our shoulders next time.
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