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Technology Stocks : Rockwell-Spins off Conexant (CNXT) -- Ignore unavailable to you. Want to Upgrade?

To: David W. Taylor who wrote (1705)	10/18/2000 11:32:54 AM
From: David W. Taylor	Read Replies (1) \| Respond to of 2013

Hot off the press from the desk of Rick Ackerman, author of "Black Box Forecasts". Interesting S&P 500 Facts 1. Those who sold their S&P 500 (SPX) shares at the end of Jan'99 and went into money market or T-Bills are ahead! That is 20½ months of futility for the buy-and-hold bulls. 2. SPX closed yesterday at a high reached 18 months ago. 3. SPX earnings are decelerating fast. Twelve-month trailing earnings per share were lower at the end of Sep'00 compared with Aug'00! For the four months ending in Sep'00 the earnings per share were up only 1.9%; this includes the investment gains. If we exclude the investment gains ($6.3B by one company Oracle alone in Aug'00) it is almost certain that the earnings were down in the last four months. 4. The peak earnings growth occurred during Dec'99-May'00 and it is no wonder that the bubbles peaked during this period. The primary reason was that earnings did nothing for 2 1/2 years, Dec'96 to May'99. It is not unusual to have a good 18 months after a poor 30 months, but ignorant bulls don't care for the facts. Earnings deceleration will become so visible in the coming four months that there would be no chance for the recovery for stocks. When Cisco reports in Feb'01 even the biggest bulls on Wall Street will throw in the towel. 5. The total market cap of SPX reached the all time high of $13.45T on September 1. More than $700B worth of new SPX shares were issued in the past twelve months. This explains why the continuous flow of money is not making the large cap indexes go up. 6. The "Index Fraud" assures that passive investors in SPX are forced to buy shares in new companies (those added to SPX) at their most expensive price. AOL and JDSU are just two examples; but the worst is yet to come when "jumping" Juniper is added to SPX. 7. The Old Economy stocks in SPX are down 22% from their Jul'99 high and the New Economy stocks are down 32% from their Mar'00 highs. Therefore, both conservative and speculative investors in stocks are doing badly. 8. If the New Economy stocks in SPX, with NASDAQ-100 as the proxy, were to go down to their close of Jan'99, as the SPX has done, it would be very brutal. Actually, three of the five NASDAQ leaders are below their highs of Jul'98 and four of the five leaders were down more than 50% at their lows last week; only CSCO remains to fall. Actually, CSCO will be down more than the other four leaders from its high; the higher they go, the farther they fall. Bulls have nothing going for them now other than hopes and wishes.