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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: brunn who wrote (41349)	1/8/2001 11:42:12 AM
From: Gottfried	Respond to of 70976

brunn, sentiment histogram shows abundance of bears stockcharts.com A/D for NYSE, NAZ, AMEX stockcharts.com G.

To: brunn who wrote (41349)	1/8/2001 1:46:34 PM
From: John Trader	Respond to of 70976

Bruhn, Good post. Your comment about the Nasdaq needing a higher return to get the same percentage actual return as for the Dow is a very good point to make. So, given that the Nasdaq has had a very low dividend yield compared to the Dow and S&P for a long time now, the question arises as to how far down the Nasdaq needs to go to in order to revert back to these other indexes. Briefing.com made a post a while back (Oct. 24th, "Stock Brief") where they implied the Nasdaq curve is likely to gown to the S&P, but I recall they left out this important distinction. Link to Briefing Story (subscribers): www2.briefing.com I find this situation today in the Nasdaq as somewhat fascinating. It seems there is a lot more negativism on the technology market by the professionals (e.g. networks such as CNBC and shows like "Wall Street Week"), but the bull/bear ratio does not look so good per IBD and so forth, and as you point out other indicators such as the put/call ratio are in line with this. I wonder if this is a point in history where many are going to make the mistake of using general market indicators for predicting the Nasdaq, when it is no longer appropriate to do so. Maybe this is a point in history where the Nasdaq starts to go its own way more, and maybe after a while the pros will adjust their market analysis methods to reflect this. Some of course will stick to the old ways no matter what. Regarding corporate dividends, I question the whole idea of them at this point in history. It seems to me that they just force a capital gain on you, and you could sell a few shares to get the same effect any time you want anyway, so there is no advantage. Also, some have argued that the Nasdaq stocks should have some sort of premium for the value of intellectual capital. This is sort of a twist on the idea that knowledge can be power. A Barrons article got into this a while back: "The New Math", Barrons 11/20/00 (subscribers): interactive.wsj.com To be a technology investor right now is largely a matter of faith, and requires optimism about the future. I just don't see that many negatives here, and also am amazed that Wall Street dislikes good tech stocks (not the dot-coms)here that are down in many cases to 1/3 or 1/4 of their value earlier in the year, given that on a long-term basis, nothing has really changed. Sure we are in a slowdown, but what else is new? The economy has never gone straight up without occasional pullbacks. I take the comparisons to the Japanese market in the early 90's very seriously, but it seems to me that such comparison are invalid. Correct me if I am wrong, but I just don't see where the valid comparisons are, other then perhaps the fact that both markets were significantly overvalued at the peak. The Fed is likely to continue cutting rates, and from a historical perspective that should be very bullish. But so far at least the market seems to think that technology is no longer the place to be. Regarding the Fed, I don't remember if the link below was posted already, but it contains some interesting comments from Merrill Lynch on the impact of the rate cuts with respect to tech stocks. John cbs.marketwatch.com "Since 1990, tech stocks as tracked by the Merrill Lynch Tech 100 Index rose by an average of 30 percent in the first three months and 60 percent in 12 months following the first Fed rate cut, according to a report this week from the investment banker. In addition, after every 0.50 percent cut, technology has outperformed the market. The report believes tech stocks could rally by 40 percent to just back to its 150-day moving average. However, Merrill Lynch cautions that its remains suspicious that fundamentals can change overnight and expects continued slowing in the first half of the year. But it has become more bullish short term."