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Technology Stocks : All About Sun Microsystems

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To: QwikSand who wrote (44517)	8/18/2001 12:08:51 PM
From: Bill Fischofer	Read Replies (3) of 64865

Hindsight is wonderful, but whether it is "fear" or "responsible caution" to be so negative after so many former leading stocks are down 70% or more won't be known for another few quarters. There are two basic approaches one can take here. The first is the "end of the world" scenario where the expectation is that the world is on the verge of Great Depression II and equities are finished for this generation. To those who hold this view there can be little argument since a firm decision has already been made. The other view is that we have seen an economic downturn exacerbated by an asset bubble but that the economy has not suffered any fundamental damage. It is interesting to note that in the 1973-74 recession both the Dow and the Nasdaq went peak-to-trough in roughly 18 months, though it took a further six months of basing before a sustained recovery took place. Since the Nasdaq peaked in March 2000, a repeat of this pattern would have us troughing in September 2001 followed by a basing period and a sustainable recovery in Spring 2002. Most folks who have survived this far without being wiped out can probably live with that scenario.

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