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To: TigerPaw who wrote (36223)	1/5/2000 8:10:00 AM
From: gnuman	Respond to of 93625

TigerPaw, re: <Is this a regression to the mean argument? > Partly. I think co's in the commodity tech area, (ie: mu), will feel a lot of pressure this year on margins and valuations. As for the "New Era" stocks, (ie: csco), I expect a winnowing out with the leaders in their segments retaining some of the aura, while those company's simply riding the dot.com/ebiz hype will feel a lot of pain. I also think the Nasdaq is the most vulnerable. The Nasdaq site provides Mkt Cap and earnings data for their markets, (both Nasdaq and Nasdaq 100). Looking at the data as of Nov ?99 end, (the last data they provide), I calculate that the Nasdaq has a P/E of 133, the Nasdaq 100 a P/E of 91, and the Nasdaq less the Nasdaq 100 a P/E of 350. That last number is the most interesting. There are a small number of Nasdaq companies with huge valuations and huge losses. I did a screen on Nasdaq and found 40 companies that had cumulative losses of ~$20 Billion. (Note, none were in the Naz100). I calculate those forty contributed about 275 points to the P/E of 350! Had I expanded the list to100 I fully expect their losses would have accounted for the bulk of the P/E number. The good news might be that it requires a correction in a relatively small number of stocks to bring the nasdaq market back to reality. But corrections tend to carry over into the entire market. And those few stocks probably represent a lot of paper wealth. Any rate, JMHO's. Back to lurk mode. <g>