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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (24922)	5/24/2000 10:13:00 AM
From: WTSherman	Read Replies (2) \| Respond to of 25960

Zeev, I'm wondering how you see the overall market action, especially in techs... Obviously, things have gone well beyond "correction" mode for many tech stocks, especially the second tier. Its only very recently that the first tier stocks(AMAT, ORCL, SUNW, HP, CSCO, etc.) have really started to get hurt. Many secondary techs are sporting PE's that would be associated with value stocks and PEG's that are very high. One way to see this is that the market is predicting a near term recession and that the current levels of growth and profitability will slow or reverse. Given the sharpness of the decline the market seems to think that this is just around the corner. Alternatively, this could simply be a supply and demand scenario, where no one is willing to buy until they see the end and this means that things just keep going lower and actually offers real opportunties for those with nerve and a longer term perspective. This is sort of the reverse of a bubble, where the air is coming out and nobody really knows how much air is going to come out. IMHO, I think its more likely the later. I don't see a recession any time soon. That would require a substantial increase in unemployment, which seems unlikely unless the Fed drives interest rates up another 100-200 basis points. Which I don't see happening. I think that Greenspan and the FOMC have to be very concerned about how far they are taking rates up. The effect of interest rate increases on economic activity takes quite a while to occur and they have to be wondering if they've already gone too far. Moreover, continued rate increases will drive the stock markets down further and create a very unstable economic environment. If they trigger a recession they will all be considered failures and Greenspan in particular will end his tenure on a very down note.