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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 (2694)	3/13/2000 10:34:00 PM
From: EL KABONG!!!	Read Replies (2) \| Respond to of 3543

Ron, That's why I believe the US markets are soaring I'll have to respectfully disagree with this statement. Only a mere handful of stocks (mostly tech, and mostly NASDAQ) are soaring right now. The vast majority of stocks remain well under their recent high water marks, and in fact, many of them are now trading at prices first reached in 1998 or well prior to that. Look at the DJ30 stocks as an example. That index first crossed 10,000 back in 1998. Remember the big celebration and all the attention that Acampora got back then? Well, guess what? The Dow just crossed over the 10,000 mark again last week. No progress in two years. And if you adjust for the fact that this is the "new" Dow (Intel and Microsoft included) rather the the "old" Dow that existed in 1998, then the index reading would be even lower than it is now. In my opinion, it is no coincidence that the NASDAQ has all, or most all, of the winners. If you listen to CNBC, or take at face value what the "experts" say on the matter, you'd reach the "obvious" conclusion that tech is in and the old economy is out. But I don't buy into that argument at all. Look at what else is happening on NASDAQ that doesn't happen on the NYSE or the AMEX. NASDAQ uses market makers (allegedly) to ensure liquidity, and emphasize a fair and stable marketplace. The NYSE and AMEX use a type of auction system for trading in their member stocks. The NYSE has floor specialists that serve the same function (again allegedly) as NASDAQ's market makers. NASDAQ stocks can be seen in Level II software. The NYSE and AMEX stocks cannot. Given the proliferation of Level II software, it's not surprising that the NASDAQ stocks are trading at ever higher volumes and prices, eventually maybe overtaking the combined volumes of the NYSE and AMEX. Look at the traders/investors that own Level II software. They swear by it. Almost to a person, they strongly perceive that they have a huge advantage over investors that don't use Level II. Daytraders almost exclusively trade NASDAQ stocks, and make heavy use of Level II software and databases. Look at the make-up of the NASDAQ. It's very, very tech heavy. Most new issues are techies. NASDAQ is much younger than the NYSE, and attracts these younger, growth oriented tech firms. So I maintain that tech (biotech, semis, software, boxmakers, etc) are doing well not because they're techs, but simply because they're visible on Level II whereas most of the old economy NYSE/AMEX stocks are not. I know that the NYSE makes it virtually impossible for one of their member companies to leave and join NASDAQ, but did you ever wonder what a McDonalds or a Disney or a Proctor & Gambel might do if they were listed on NASDAQ rather than the NYSE? In my opinion, until the NYSE makes available to investors something similar to Level II, their stocks are going to suffer; I mean really suffer. KJC

To: Hawkmoon who wrote (2694)	3/13/2000 11:42:00 PM
From: Mad2	Read Replies (1) \| Respond to of 3543

But in fact, most of those costs they would pass on to their customers were they able to. But they can't because this disinflation is being caused by rapid advances in productivity and efficiency, as well as foreign competition for commoditized items. Only those companies who are able to execute without inefficiencies and excess costs will prosper. Many old economy companies are enduring this painful process now. Well, I'd view that part of the rapid advances in productivity and efficiency as just another way of saying that decisions are made quicker and the decision makers are better informed, dammaging the value (pricing power) of many of the smokestack industrial suppliers (steel, chemicals, resellers and those in the value chain that can't control their markets). The strength of the USA's tech sector is keeping rates and $$$ value up further erroding competitiveness of basic manufacturing firms in the US. With oil, labor and the cost of money headed up and the economy eventually slowing I not too optimistic. Most interesting is the reliance of many in the tech sector on capital as compared to earnings. Should the investing community change their appetite and decide they've had enough sector rotation without return of shareholder capital and opt for a healthier dose of earnings/dividends the tech sector could be ravaged with reckless abandon. Without a doubt valuations in the tech sector are being driven by technical factors (float, supply, demand, and a generally optimistic of what the future can be) as compared to fundamental. Anyway, I've got a very healthy portion of my capital in cash with a few select positions in what I believe will be a couple up and commers in the tech area (with limited downside). I do feel the tech bubble will end when investors percive AG's job has been accomplished, the economy will at that point look troubling going forward, old economy stocks will be in a shambles (might even look cheap even in a shrinking economic environment as MO does now) and bonds will emerge as a no brainer. I half heartedly think that the Fed secretly has been lobbying OPEC to drive up the price of oil, as without oil putting a drag on the economy we'd be speculating that all commodities would eventually go to zero, enabling americans and whoever else migrates here could retire and become stock speculators:?) Best Regards, Mad2