Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : IDTI - an IC Play on Growth Markets -- Ignore unavailable to you. Want to Upgrade?

To: Stu E. who wrote (11011)	11/30/2000 12:06:22 AM
From: Rob S.	Read Replies (2) \| Respond to of 11555

The mood of the market is ugly. The NASDAQ has only suffered this degree of sell off once before, in the 70's. Valid arguments can be made for valuations of many tech stocks despite the downward revisions in growth expectations. After all, the revisions for industry growth is similar to the recent downward guidance from Gateway - going from 25% growth to 15%-20% in 2001. In a "normal" year, 20% growth would be considered good but because expectations had been built to bursting bubble levels and a market climate in which money is looking for reasons to get back in, this is a being taken as a big disappointment. Over the next few weeks we have the earnings pre-announce period and tax-loss selling to look forward to. These things normally are taken in stride and only effect stocks that have under performed, but this year they will effect most tech stocks. We need for the downturn to work itself out of all of the high flying sectors so that total market capitualation occurs imo. The biotechs may be the last hyper sector to fall. Blood is nearly running in the streets but investors are still complacent and there is little sense of outright panic or disgust. For that reason, many think that the market must crash further - to the point where the antithesis of last winter takes place. During the "new economy" period any dot com or tech stock shot up almost vertical and investors wrung their hands in glee with how rich they had become almost overnight. I had conversations with people in January-March who had never invested in the market who asked me if they should invest in Amazon, Yahoo!, Cisco, CIEN etc. I just had a conversation this evening with a guy who invested during that period because he did't want to see the market pass him by. Now there are people asking if they should sell stocks and buy gold! Some investors are getting worried but not enough to say the market has seen capitulation. A major reason why it is so difficult for the market to get to a point of capitulation and reversal is because the very nature of the market has changed. Much more than ever before, there is no single "market". Instead, there is the semi sector, the bio-tech sector, the fiber-optic telecom sector, the B-to-B sector, the internet sector, the oil sector, etc. The bear market is NOT a broad downturn of devastating proportions as much as it is a convergence from the previous levels of market dislocation between the techs and everything not tech. We had a great, drunken party earlier this year and know we are suffering the hand-over. From the macro-economic perspective, there is nothing much changed in the broad economy except the normal ebb and flow of liquidity and expansion/contraction cycles. There is no recession and there is little prospect for a significant one to occur. There is no solid reason for the FED to lower interest rates and there will likely not be a drastic reason for them to do so in the near future. All that there is is a momentum downturn in the roller coaster valuations of stock prices. This is no more than the efficient workings of the market (however screwed up by near sighted analysts). Techs got too high and the rest of the market got too ignored. Good solid low-tech companies need reasonable access to capital too. This shake out in the tinker town techs is good for the market, good for Ameiraca, - so bring out the apple pie and ice cream! The end of this downturn is within a couple months of seeing the low for the NASDAQ - I think around 2350-2450 (which could happen this week!).