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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Anthony@Pacific who wrote (50603)	1/24/2000 11:53:00 PM
From: Cheeky Kid	Read Replies (1) \| Respond to of 122087

Year-1995, was there a crack down that year in the US and Canadian markets? RE: Message 12505937

To: Anthony@Pacific who wrote (50603)	1/25/2000 8:07:00 AM
From: ztect	Respond to of 122087

Some Ingredients for Over Valuation Big Firms, Venture Capitalists, and their IPO's. I keep looking in amazement at the pricing and capitalization of stocks on all of the indexes. Some stocks are getting like a 700 sf 1 bedrm house in Palo Alto or a condo in Manhattan. One pays a premium to be where the action is at, when one could instead live in a mansion in Kentucky. Inflated stocks like inflated places to live seem to have something in common: people willing to pay inflated prices. Wealth creation from new technology has largely financed this prosperity. In part, the relationship between venture capital and large finance firms drives this wealth creation. Though this is somewhat simplistic for the purpose of being brief, venture capitalists want to get the greatest return on their investments, and bigs firms want to get the greatest returns in the holdings of company IPO's these firms underwrite. Consequently, prices get elevated, Vc's cash out part of their holdings for unbelievable gains, and big firms establish "buy" ratings with high targets seemingly out of self interest. The fortunate ones are in early or time the peaks and valleys appropriately. The unfortunate ones are left holding the busted balloon, especially when all the restricted shares become tradable. The majority of the wealth created is consolidated and looking for the next opportunity. Those that have cashed out need somewhere new to place there exceptional earnings. These people don't need to be as prudent or discerning. Consequently, the places deemed attractive become attractive places to invest. Such investing drives up prices, and ultimately intrinsic value gets overwhelmed by perceptions, visions, and trends. Price is establish partly by what people can afford to pay. Many people now can pay a lot, while others pay more than they can afford. Or, at least, that is just my point of view. z