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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (12298)	3/7/2000 1:47:00 PM
From: Justa Werkenstiff	Read Replies (2) \| Respond to of 15132

Sam: Re "The more interest rates rise, the more pressure on companies to cut costs and find innovative ways to use technology. And the more "new economy" companies benefit." No argument here to a certain extent; however, some technology spending will be reduced if a company has earnings problems like P & G. But the issue is how much does one pay for these "new" economy companies. Does one pay more for these stocks while the FRB is raising rates and is trying to slow the economy which includes the technology sector? Hasn't the story been discounted and more at this point in time? As a footnote, the "new economy" stocks should not include the biotechs as they do not lower corporate costs. Their move is purely speculative. This is not to say they don't have promise. But to run them up 100% in a few days shows the underlying speculation in the high flyers including much of the technology sector. Re: "Technology stocks become the only game in town as 'old economy' stocks keep trying to just stay in the game." Yes, and the water keeps draining out of the pond and the fish have to scurry to find a new pool of water. How long will this last? I don't know. But I choose not to be a fish. Re: "Whether the reality is different or not, surely that is part of the perception that keeps driving the Naz higher while the Dow sinks, or treads water." It is the pure momentum to find the remaining pools of water. In a sense, the "old" economy stocks are the victim of the "new" economy stock's valuations. If the "new" economy stocks are driving the wealth effect and they keep going up, the Greenman will have to hammer the "old" economy stocks that much more to have an impact on the "new" economy stocks.