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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (38632)	1/30/2000 7:30:00 PM
From: Crimson Ghost	Read Replies (2) \| Respond to of 99985

I got this E-mail today from that Hong Kong guru. Very bearish on tech near-term, but still utra bullish long-term George, I think tech stocks will get hammered during the current correction. Many of the high-fliers of the past year will lose 50% of their value (or much more) and a large number will never reach their Dec99/Jan00 highs again. However, if the market doesn't completely cave-in over the near-term, thus allowing the economy to remain strong, the earnings of many tech companies will explode upwards during the second half of this year as the next round of upgrades happens en masse (the previous round happened during late 98/early 99 in preparation for Y2K). We will also see the coming together of new product offerings from MSFT, INTC and Rambus (on the PC front), the further (and accelerated) convergence of Internet, cable, satellite and telephone, and the more ready availability of broadband Internet access (this opens up huge possibilities for the entertainment and information industries). The accelerating pace of technological innovation will mean that huge fortunes will be made over night for those who are in the right place at the right time and will guarantee that tech stocks will attract the greatest investment demand in the market for years to come. I think the main difference in the future will be that stock selection will be far more important than it was last year (the ridiculous situation where companies with almost no business and that give away their service for free getting billion dollar market caps will be a thing of the past). Anyway, FWIW here's my prediction. Before this bull market ends, that is, before we get a secular bear market, we'll see the NASDAQ Comp somewhere north of 10,000. I also agree with you that the value stocks will pick up during the next rally. Many people forget, or just don't know, that the majority of stocks have been in a bear market for almost 2 years. If the market can be prevented from collapsing then the next phase of the bull should see broader participation (one reason I think the NASDAQ Comp will out-perform the NASDAQ100 over the coming years).