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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (20913)	4/15/2000 7:07:00 AM
From: GraceZ	Read Replies (3) \| Respond to of 29970

AT&T, Microsoft Gear Up for Japan Cable TV Drive home-news.excite.com

To: ahhaha who wrote (20913)	4/15/2000 10:01:00 AM
From: MIKE REDDERT	Read Replies (2) \| Respond to of 29970

Here's a better clarification of your supply side argument, from Barrons... the magnet of supply. One question... where would expect sufficient supply to exist on ATHM at this point, taking into consideration all fundamental factors and the behavior of crowds ? ... or is this unknowable. Q: What do you make of the recent volatility? Had the Nasdaq become overvalued, in your opinion? A: There are a number of things going on, and we're not out of the woods yet. Let's be clear about that. Bear-market rallies are much sharper than bull-market rallies. Things are tentative. Too much money was made too easily by too many people, and the world doesn't work that way. It would be nice if it did. What some people call New Economy stocks were overbought. Too many people were buying these stocks only because they were going up. The stocks went up so much because there was a lack of liquidity. The market is an evil creature. It will find a way to hurt the most amount of people that it can. It will set a trap. How it lays the trap is always different. Sometimes it's a macro event, it's interest rates, it's something overseas or it's a sector shift. The trap this time was liquidity, which was triggered on March 10 by a rotation out of technology and into names that had underperformed. Market-makers are not in the business of losing money. Traders take no risk on trading desks. Traders on sell-side desks are not in the business to facilitate trading. They are going to make bad markets. You call me up and say you want to buy 100,000 shares of AMCC at 140. I see some for sale at 144. I go and buy it at 144 and I come back to you and tell you it's 145 and you get it at 145. I make a little bit of money, you get your stock. Stocks have been volatile because they are illiquid and that makes the market real sloppy. You had people buying on margin. And, I believe, there were value funds and growth-and-income funds breaking the intent of their funds' mandate and not always knowing what they owned. Combine that with a situation where a lot of money has been made really quickly, people's first reaction is to sell. The other bad part about this is rising interest rates, which is never a good thing.