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Non-Tech : Tulipomania Blowoff Contest: Why and When will it end? -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (2692)	3/13/2000 9:25:00 PM
From: Mad2	Read Replies (1) \| Respond to of 3543

Interesting points. I'd like to comment on; Already, we can see the DOW being broken by the faster growing Nasdaq stocks. And within the Nas, a sector rotation that constantly shifts to the industry promising the greatest growth prospects. While part of what you say is true (money flow out of mature businesses into tech sector), I'd suggest that the fed's clear efforts at slowing the economy by raising rates is a triple hit on mature businesses who will have higher cost of funds, suffer a dilution of their earnings attractiveness and presumably will slow their growth prospects. Disinflation further depresses the perceved future value of their underlying assets. The shear sucess of the tech sector since Oct 98 is attracting funds that will likely continue untill higher rates have the desired effect of slowing consumption and thus growth. I wouldn't characterize the tech sector as being necessarily attractive from a return standpoint, rather its being percived more and more as the only game in town (bonds stink with rates headed up, gold, reit's stink due to the percived sucess in keeping inflation at bay), at this point it's either techs or cash, and mutual funds are penalized of late for cash. Thus if you can't beat'em, join'em. Mad2