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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: edamo who wrote (149685)	12/22/1999 9:57:00 AM
From: TechMkt	Respond to of 176387

New coverage initiated today. Fez _____________________ Dell Computer DELL CE Unterberg Towbin ¯ Buy History .

To: edamo who wrote (149685)	12/22/1999 10:58:00 AM
From: Chuzzlewit	Read Replies (3) \| Respond to of 176387

Edamo, There are lots of similarities. The major point to bear in mind is that bubbles aren't based on reason -- they are based on the lack of reason. So while it's true that the Japanese economy and the U.S. economies are fundamentally different, that is entirely beside the point. 1. During the latter stages of the Japanese bubble investing in the stock market became a national obsession, with brokerages opening on many street corners. In this company we have a proliferation of brokerage ads during football games and sit-coms; 2. At the height of the bubble Japanese stocks were trading at 60 times earnings and 200 times dividends. I think you will find that those numbers are dwarfed by the NASDAQ multiples today; 3. There was the widespread belief that "this time it is different". In Japan it was the belief that the MoF would not allow a market crash. Here, we believe that strong cash inflows into 401Ks and the like will keep the market expanding. 4. Next, the Japanese bubble continued to grow in the face of increasing interest rates. In the expectation of increasing inflation the Bank of Japan decided to preempt the inflationary spiral, arguing, as the Fed does now, that it is far better to tighten credit before inflation becomes reality than efter. The Bank of Japan, too, was concerned about asset inflation, and hoped that the tightening would lead to a gradual decline in stock and land prices. Ultimately, this tightening precipitated the crash. Need I say anything about the interest rate environment here, or the Fed's stance? The final point is that the Japanese market crash had no measurable affect on the Japanese economy which continued rolling along into the 1990s. The crash's main result was a revaluation of securities back to the levels they were at in 1984. The bubble lasted around six years -- beginning in 1984 and ending in 1990. TTFN, CTC