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Technology Stocks : SAP A.G.
SAP 252.58+0.3%12:23 PM EST
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To: MulhollandDrive who wrote (2502)9/9/1998 3:04:00 PM
From: mauser96  Read Replies (1) of 3424
 
OTOT... BP...I hadn't really thought of it that way, but your description of "a bunch of momentum players riding the same stocks up and down" is a pretty good description of todays markets. People buying into big mutual funds are getting diversification from an industry classification standpoint, just not from a size standpoint. Stock indexing has been a self fulfilling prophecy on the way up, but it will also intensify the fall on the way down if any correction gets steep enough. Almost by definition large caps have to dominate markets. Even if they do get very expensive the small caps can't absorb a lot of $ without quickly becoming overpriced themselves. But it certainly has been way too one sided the last couple of years. Actually, I think that there is a chance that the really beaten down small caps will outperform for a while after tax selling is over. Rising prices would quickly create a bigger demand for these stocks, but this is sort of a "chicken or the egg" argument.
I don't know of a grenerally accepted definition of large cap, but I use about $12 billion as my dividing line. Some smaller caps with a compelling story are doing OK, but generally those persisting in holding small caps have been mauled.
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