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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Rocky Reid who wrote (16856)	11/28/2000 8:36:30 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

"Even a Fed easing of Int. rates I feel won't reverse this nightmare. I think we are in this for the longer haul." It is useful to compare the similarities AND differences between the current correction and that of October, 1987. NASDAQ is now down percentagewise about as far as it fell in 1987. In 1987, there were no circuit breakers, trading curbs, etc., and individual investors had a much smaller percentage of trading volume than they do now. In 1987, the market collapsed mainly because a sudden increase in interest rates by the Fed forced the dollar to extremely high values against foreign currencies, putting even more pressure on exports. The Fed was in a far greater anti-inflation mood then compared to now. And in terms of overall growth, the domestic economy was much weaker than it is now, even adjusting for lower growth projections for the current quarter, and revised lower projections for last quarter (due out tomorrow). Thus, the weakness in tech stock prices that we see now is different from the structural weaknesses in 1987. Now the main problem is institutional investor psychology, brought on by a combination of election jitters and simple misinformation about the nature of high tech products and how the demand for high tech is shifting away from traditional desk top computing to handheld devices, with complementary changes in peripherals, including flash memory storage in place of disk drives. You can call this a bear market, but I don't see it doing nearly the damage that happened in 1987 for the reasons advanced above. Art