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

To: Hawkmoon who wrote (1532)	12/21/2000 9:17:14 AM
From: TobagoJack	Read Replies (1) \| Respond to of 74559

Targeting NASDAQ at 1,400 … the 10% per annum over 11 years was a spuriously chosen target for an over-correction. As we have now reached the NASDAQ 2,300 level without overt panic, then the 1,400 target may even be optimistic. I do not know the exact formulae for the NASDAQ index, but assuming that the top 10 capitalized stocks account for 85% of the weight in the index, then returning these 10 stocks to a more traditional and sensible price to free cash flow (if there is any free cash flow) or price to realistically calculated profit (and that counts out CSCO), add a dash of panic, and we could easily reset the index to even below 1,400. On Al Greenspan and his obligation to provide smooth cold turkey cure for the morning after, I believe he is precisely trying to talk the market to semblance of health and wealth without cutting rates so as to offer the faithful (mom and pop) and the smart (institutions) a chance to get out while the getting is still good. I do not think he can comfortably cut rates, as the rates are not high when compared to the asset inflation rate, and the rates attract foreign capital. He also cannot allow the institutions to fail, and so he talks.