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Technology Stocks : VLSI Technology - Waiting for good news from NASDAQ !!!
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To: DanZ who wrote (4358)9/14/1998 8:08:00 PM
From: James F. Hopkins  Read Replies (1) of 6565
 
Dan; Something I noticed about the major indexes that I have not found mentioned, is over time the Small and Mid cap indexes work at a
general handicap to the S&P500.
The S&P500 is enhanced by bringing in
growing stocks, and dropping laggards. In the S&P500 a stock can
climb the ladder, and it does not out grow the index, if it gets
bought it will still be by another S&P500 stock. But with Mid
and Small caps, many stocks out grow the index, or get gobbled
up by larger companies.

In other words even in a good market, the MID and SML indexes don't
have the same advantage the S&P 500 does, the tops are always
getting clipped off. In a down market they can also lose any real
winners that may happen to get lucky.
I guess I'm saying when we compare the indexes they are not just
Big apples to small apples, all things equal there is likely some
handicap that needs to be given the SML cap indexes, but I have no idea of how much. If over several years we tracked the ones that
graduated up we might could find a general yard stick to use.
Jim
PS I was negitive on this sector back in May, but it's had a good
hair cut since then and I'm starting to sniff around.
In fact as long as this sector stays under attact, I think the
rest of the market could have more down side. I feel it's the Sox
that should mark a bottom I thought it was about the end of July,
but missed that.
Jim
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