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

AMZN 234.37

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3:59 PM EST

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To: H James Morris who wrote (127582)	7/1/2001 3:28:12 PM
From: craig crawford	Read Replies (2) of 164684

another thing i find interesting is the seemingly universal phenomenon where markets tend to fly in the face of fundamentals near major market turns. there are numerous examples of this. i will cite a few. back in the late 1920's most world markets had topped out by 1928. and a few made it until the start of 1929. only the u.s. kept going until the fall of 1929 and then we all know what happened. just like we had a scare and correction in the fall of 1997 and 1998 and then the fed cut rates, back in october of 1927 the market corrected and the fed had cut rates, leading to the final blow-off. we saw the same phenomenon this time around. many countries around the world topped in '97/'98 due to the asian/russian/latin american crisis. of course we became the last bastion of strength and the only good place to invest so money flowed in and we had a blow off top. same thing in 1987. world markets crashed in the fall of 1987 including japan to a lesser degree, but japan shrugged it off and had a huge blow off top for another 2 years while the rest of the world recovered much slower. in october 1979 newly elected fed chairman paul volcker changed the fed's policy from targeting interest rates to targeting money supply. he said he was going to break the back of inflation. didn't stop gold from going on a manic binge heading into 1980. greenspan hiked rates several times starting in 1999 and the techs still went on a blow off binge heading into 2000. time and time again you can find examples of where the cracks in the system were starting to appear, or there was clear evidence of a change in fundamentals, yet momentum was so strong the markets ignored the obvious and proceeded to continue the other way. that is another reason i don't want to get too bearish on stocks or too bullish on gold. inflation is going to come back. trust me on that. the seeds are sown and they are just showing signs of sprouting. everyone should forget about financial assets for the next 10 years and learn all they can about inflation and hard assets. but that doesn't mean the market won't ignore the signs and confound everyone for a while in the meantime. in other words the dollar keeps confounding everyone and going higher, gold can ignore signs of inflation and go lower, etc. gold probably won't really take off until 8 or 9 years from now. it will rally before then, but it probably won't top out until sometime around 2010 or later.

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