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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Sarmad Y. Hermiz who wrote (103384)	5/13/2000 8:06:00 PM
From: GST	Read Replies (1) \| Respond to of 164684

Sarmad: <Re tech. Is your view that rev/earnings will be light, or only that the P/E's will get compressed?> I think that earnings can be very good -- although they are at some risk. Interest rates are now high enough to be a factor and as they go higher their importance increases. A Fed funds rate of 7% is a real issue. As a result, I think there will be substantial multiple compression. For the "high fliers" (new economy as some would say), this compression will be very bad for their market caps. Many companies have been indirectly benefiting from high valuations -- like GE, Chase, CISCO and many others. They will face head-winds. Assuming no recession -- and that will be an issue as the year goes on -- but assuming the economy holds up, the market will go sideways while at the same time the "new economy" will get its collective market cap pounded. As for inflation, if the dollar weakens (which it might due to the huge current account deficit), we might be in trouble. As the "new economy" bs peaks out, the job market may cool off enough to offset the current tightness. Hard to say on that one. It is SO tight now, it could well be the main issue going forward.