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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: quasar_1 who wrote (258)	10/26/2000 3:44:17 PM
From: Erik T	Read Replies (1) \| Respond to of 74559

What does any of this price movement have to do with reality? Painfully little... Except that if stocks continue down there is a risk of less liquidity. There are a lot of companies that will need more financing or risk going out of business. This includes many new-era techs as well as some more stodgy old-economy ones. The high-yield corporate bond market has been devastated of late and if this continues then the lower stock prices will have an effect on "reality." I agree with most of what you say. There are companies that are undervalued by just about any metric, but they have been pushed aside for all the new-era companies. As you say just because they are "undervalued" does not mean they are going up anytime soon. These companies have been unable to go up during a period of investment euphoria. If sentiment changes direction, these same "undervalued" companies may become even more "undervalued." Just my thoughts. As is happening today I think investors will continue to vigorously defend the NASDAQ 3,000 level. If we break down below that we are in for a lot more hurt. As for the Euro, it is just about time for the central banks to intervene again. Friday seems to be a popular day for that sort of meddling in "free markets." So I look for a pretty good up day tomorrow. Erik