To: IQBAL LATIF who wrote (30947 ) 4/20/2001 3:14:16 AM From: IQBAL LATIF Read Replies (1) | Respond to of 50167 Read this about old economy and new economy? AG was raising rates in Feb of 2000, it was hurting DOW a big and pundits were bidding Tech higher as being insulated from the interest rate hike, I said bs, new economy valuation models will be hurt the most, go into old economy that was my preamble for famous DOW positioning at 9600 In Feb.. <<WE did test 1491-92 area and went below that interim support of 1482 to close at 1477 at one time we were as low as 1469-70, much above key pivotal 1462-65 support on SPM, I think market has built in two hikes not one, so one hike today may cause a little volatility but nothing more, asset deflation target is moving along alright for AG, his earlier hikes were hitting the old economy far more severely than the pockets where new inflation infested wealth was churning out at full speed, now that some order is in place and he would look at this closing gap betweenthe old and new economy valuations he would intelligent enough a man to prod the move in the right direction, close this divergence and this lop sided relationship between market captilisation and earnings would disappear, to be more specific we have 489 bn $ say 500 bn $ earnings for a total market cap of 12.8 trillion$. Out of this market cap of 12.8trillion $ 4 trillion makes nothing but promises the other 8.8trillion$ carries the entire weight of the market with its earnings. However, that sector sells at a huge discount and the one that promises rose gardens to make money from the 'money making segment' of the market sells at premium of 200 times 2001 earnings. Now that is rich asumption by any standards,firstly when AG rises rates it is the earning making sector that is hit the hardest but it is short-termism at its best the argument that new economy would not suffer as they don't have debt is nothing but non-sense, after all all these new economy companies future incomes stream are discounted to present, with interest rates rising that takes a huge tool on their vlauations, far bigger than interest rate hike cost on old economy debt. The second reason that new economy cannot survive without old economy is based on new economy cash flow so much dpenedent on the good health of old economy, after the credentials of any new 100 billion $ company floated overnight are only one it has either list of Fortune 500 clients or hastechnology to sell them, so go KM with your children money abnd buy Outo f the monies for these speculative stocks once they close above the 13 days MA twice on NDX, be late but don't be sorry, MY kids retirment funds deserve a little deeper thinking than noise of the web OR SI FOR THAT MATTER, yes we don't make a 100 in overnight but we don't loose it either on weeks like now, be in the new economy with your speculative money and in the old economy like IBM MSFT TXN LSI LRCX AMAT csco emc AND OTHERS I HAVE HIGHLIGHTED MANY TIMES BEFORE WITH YOUR REAL MONEY IN LONG TERM I THINK I WILL DO ALRIGHT..>> Message #30947 from IQBAL LATIF at Mar 20, 2000 10:45 PM