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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: larry who wrote (19346)	3/10/2001 6:34:38 PM
From: MIKE REDDERT	Read Replies (1) \| Respond to of 24042

Larry, I was also surprised by the rapidity of the fall, but I'm a trader and thus keep most of my money in T-Bills... particularly when PE's become hyperinflated... because of this, I was relatively unscathed by the current crash. I don't question your assessment of what happened to date, but I do take take issue with your analysis of where we are in the cycle at this time. The Nasdaq market has crashed some 60%. In perspective, at the absolute nadir of the Great Depression, the market was down some 89% and if memory serves me, the 73 -74 collapse was approximately 43 %. The Nasdaq's plunge is far worse than any crash since the great depression... it falls way outside of the norm. Additionally, in 73 -74 the market took a long time to to get to those depressed levels. Nowadays, with immeadiate access to news and analysis, markets discount in "quick time". As to valuations, by neglecting techs, investors have created excesses in other perceived "safe" stocks. Merck, for example is trading at a trailing PE almost equal to those of SUNW, DELL, and MSFT... with nowhere near the growth potential. With that in mind, I submit that we are far closer to a bottom than we are a top in techs: 1) Markets today discount valuations quickly and severely. Comparing time frames in today's markets with those of 73-74 are erroneous. 2) We have an accomodative Fed and growth companies do well in in the beginnings of a new expansion. 3)Money has flowed into areas of the mkt that have virtually no chance of sustaining those valuations. Once money starts flowing out, the glimmer of safety will fade quickly, and investors will seek growth... particularly in an expanding economy... and the Fed has every intention of reinflating this economy... look at M2. 4) Every recession looks hopeless before the dawn, and I have have witnessed many that have looked far more grim than the current... maybe not market-wise, but most certainly economic. With this in mind, I'm am looking to start placing some cash in techs... long term. I don't care if the market hiccups around down here in the -60% level. Mike