SI
SI
discoversearch

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 : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?


To: Bill Harmond who wrote (120032)3/11/2001 4:58:14 AM
From: H James Morris  Read Replies (1) | Respond to of 164684
 
Good for you Bill. Have you ever thought about going on the survivor TV show?
Btw
Check out the S&P food sector!
>Published: March 9 2001 21:18GMT | Last Updated: March 9 2001 21:22GMT
When the Nasdaq Composite Index burst through 5,000 to reach its short-lived peak last March, investors gathered in excited knots by the market's high-tech electronic showcase on New York's Times Square to applaud the phenomenon of the age.

A year on, the exuberance that greeted each new high for the index has been replaced by wariness - and realism. The inverted "V" traced by the Nasdaq over the last two years has come to represent both the promises and the risks of equity investment.

"People are now saying, 'yeah, we probably shouldn't have stayed in as long' - but you never know it's the top until you look back," says Art Bonnel, portfolio manager of the US Global Investors' Bonnel Growth fund, which has seen assets under management shrink from $400m to $160m.

The Nasdaq now trades nearly 60 per cent below its peak of 5,048.62 on March 10 last year. Some stocks, most notably those that represented a pure internet play, have fallen more than 90 per cent.

Investors did not have to be trading individual stocks to lose out: technology mutual funds have fallen by almost the same amount as the Nasdaq, according to Morningstar, the fund analysis company.

In the process, entrepreneurs' hopes of bringing their high-tech companies to market - or financing further expansion - have been dashed, and the overall US economy dented.

The market for initial public offerings, the rocket fuel that helped propel the Nasdaq to its peak, has dried up. In the 10 weeks to March 10 2000, there were 79 IPOs worth $10.9bn, according to Thomson Financial Securities Data. Barely 20 have been completed so far this year, worth just over $3.6bn - and more than half of those proceeds came from the IPO of KPMG's consultancy arm last month.

The Nasdaq's demise contributed to an almost simultaneous collapse of confidence in technology-heavy markets around the world, and undermined other US equity indices such as the S&P500 and Dow Jones Industrial Average, which are still down 17 per cent and 7 per cent from their respective peaks last year. Unlike, say, the 1987 "crash", when the Dow fell 23 per cent in a single day, the collapse of the Nasdaq was spread out over the full 12 months.

One characteristic of its decline has been the eagerness of bulls to cling on to pockets of strength in the technology sector. A year ago, for example, bullish analysts and investors argued that high interest rates, which were already knocking established companies' stocks, would not have an impact on the tech sector because established companies still needed to upgrade their systems.

But demand for personal computers, handsets and telecoms infrastructure has gradually eroded over the last 12 months, undermining companies such as Dell Computer, Cisco Systems and Intel that, far more than the dotcoms, were the pillars of Nasdaq's strong performance.

"They were trading at 80 to 120 times earnings," says Mark Regan, who manages the $5bn MFS Mid Cap Growth Fund. "Let's say they were all growing 35 per cent long term. You can't make money [on those stocks] - your growth rate doesn't support your multiple."

After a year of gloom, however, some strategists have begun to call a turn in the bear market. In the last week, Morgan Stanley Dean Witter, Merrill Lynch and Goldman Sachs have all suggested that investors increase their exposure to US equities.

"Typically the market hasn't responded until three months after the first Fed rate cut. So just because we haven't gotten a response I wouldn't throw your arms up in despair," says Jeffrey Applegate of Lehman Brothers, one of the most bullish of Wall Street's strategists. "I think the decline has mostly occurred, and you have to think, where are we going now?"

But the after-effects of the Nasdaq's rapid rise and sharp decline may linger. On the way up, investors' enthusiasm for any growth stock in effect reduced the effective cost of capital for expanding technology companies to zero. That contributed to overcapacity in the sector and is now leading to corporate failures and profit warnings that have not yet played out. Other sectors have, almost unnoticed, turned in strong performances while technology stocks have declined. Rich Bernstein, chief quantitative strategist at Merrill Lynch, points out that the S&P foods sector has risen 45 per cent in the last 12 months, opening up a 100 percentage point gap with technology.

"I'm watching CNBC [the business TV channel] right now and they're doing a special on dotcom survivors," he says. "Why aren't they talking about Rice Krispies?"

The Nasdaq itself could yet fall further. The index's forward price-earnings ratio of nearly 60 is still almost three times that of the S&P500, and lower-than- normal inflows into equity mutual funds in January and February may be the first sign that chronic underperformance is beginning to deter investors.

Doug Cliggott, of JP Morgan Chase, points out that the average five-year return on the Nasdaq fell to 5 per cent a year after the last meaningful slowdown in technology spending, in 1991: "Let's assume we start the clock at the end of 1997 and grow it at 5 per cent a year. We come up with the Nasdaq at 2000 at the end of 2002. In round numbers, it's essentially where it is now. Given how high valuations are in many of these leading names, that doesn't strike us as unrealistic at all."

Given the euphoria and blanket coverage with which Nasdaq's rise was celebrated, it may be that a sustained decline is the only way to wean US investors from their fixation with the index. As Merrill's Rich Bernstein puts it: "I've never seen so much interest in a sector that is in a bear market in my entire career.



To: Bill Harmond who wrote (120032)7/14/2001 3:35:42 PM
From: craig crawford  Read Replies (1) | Respond to of 164684
 
william,

just thought you longs might want some more proof that you can't trust the government's self-serving bogus numbers. perhaps after reading this you might want to make some adjustments to your portfolio allocations.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Labor Statistics Are Lying
interactive.wsj.com

By Lincoln Anderson, chief investment officer at LPL Financial Services in Boston.

But there is a little secret in the employment report that you should know about. The Labor Department said that payroll employment fell 114,000 in June. What it did not tell you is that this reported change includes a "bias adjustment factor" that adds about 160,000 jobs a month. This bias factor is basically picked out of thin air, and is supposed to capture employment in newly started firms that Labor misses in its survey. In other words, Labor doesn't know how many new hires occurred at new companies, so it assumes a number. In its June report, it continued to guess that it missed 155,000 new hires.

The problem is that when the economy slumps, so do new business start-ups. A good indicator of new business starts is the Conference Board's index of help-wanted advertising. This index has plummeted back to levels last seen at the end of the 1990 recession. Back then, the bias factor also fell to zero, instead of hanging at the same level as in the boom period of 1998.
...........................................................................................................................
This is more than an interesting exercise in statistics. Over the past five months, after taking out the bias factor from the payroll measure of employment or using the household measure of employment, it's clear that we have experienced a bigger drop in employment than occurred over the first five months of the 1990 recession. The $64 question now is whether it reflects "good news" that companies are adjusting quickly and cutting costs or "bad news" that the economy is in a recession. I hope it is cost-cutting, but only time -- and cleaner statistics -- will tell.



To: Bill Harmond who wrote (120032)7/15/2001 3:52:58 PM
From: craig crawford  Read Replies (1) | Respond to of 164684
 
new economy huh!
~~~~~~~~~~~~~~~~~~~~
July 13, 2001

Spate of Write-Offs, Charges Calls
Into Question Lofty 1990s Profits

interactive.wsj.com

By STEVE LIESMAN and JONATHAN WEIL
Staff Reporters of THE WALL STREET JOURNAL

Was the corporate-profits miracle of the late 1990s partially a mirage?

Along with tame inflation and low unemployment, outsize corporate-profit growth stood as one of the pillars of the booming economy and underpinned the stock market's historic bull run. From 1995 through 2000, the Standard and Poor's 500-stock index registered compounded annual growth of 23.3% as earnings grew at a 10% annual rate -- far above the 6.6% pace for the S&P from 1948 through 1994.

In recent months, though, many big companies -- including AT&T Corp., Cisco Systems Inc., Lucent Technologies Inc., Nortel Networks Inc., Walt Disney Co. and Wells Fargo Inc. -- have announced whopping write-offs and charges to earnings. They have slashed the value on their books of everything from investment portfolios and customer loans to inventory and the carrying value of acquisitions.

Since the economy began to slide in the fourth quarter, S&P companies have announced write-offs and other "special" charges of about $50 billion, according to data provided by Multex.com Inc., a financial-research company. That total for the six months ended March 31 is the highest dollar amount by far for any recorded six-month period and the second-highest as a percentage of pretax income since 1992. And the trend is expected to continue as companies release their second-quarter earnings in coming days and weeks.



To: Bill Harmond who wrote (120032)6/6/2002 1:22:29 PM
From: craig crawford  Read Replies (1) | Respond to of 164684
 
prepared for next week's crash my friend? heed my warning!



To: Bill Harmond who wrote (120032)8/13/2003 5:16:02 PM
From: Cyprian  Respond to of 164684
 
What is a neo-conservative anyway?
atimes.com

By Jim Lobe

WASHINGTON - With all the attention paid to neo-conservatives in the international media nowadays, one would think that there would be a standard definition of the term. Yet, despite their now being credited with a virtual takeover of US foreign policy under President George W Bush, a common understanding of the term remains elusive.

In this context, it may be useful to offer some description of their basic tenets and origin, if for no other reason than to distinguish them from other parts of the ideological coalition behind the administration's neo-imperialist trajectory; namely, the traditional Republican machtpolitikers (might makes right), such as Vice President Dick Cheney and Pentagon chief Donald Rumsfeld, and the Christian Rightists, such as Attorney-General John Ashcroft, Gary Bauer and Pat Robertson.

As neo-con godfather, Irving Kristol once remarked, a neo-conservative is a "liberal who was mugged by reality". True to that description, neo-conservatives generally originated on the left side of the political spectrum and some times from the far left. Many neo-cons, such as Kristol himself, have Trotskyite roots that are still reflected in their polemical and organizational skills and ideological zeal.

Although a number of prominent Catholics are neo-conservatives, the movement remains predominantly Jewish, and the monthly journal that really defined neo-conservatism over the past 35 years, Commentary, is published by the American Jewish Committee. At the same time, however, neo-conservative attitudes have reflected a minority position within the US Jewish community as most Jews remain distinctly liberal in their political and foreign policy views.

Neo-conservative foreign policy positions, which have their origin in opposition to the "new left" of the 1960s, fears over a return to US isolationism during the Vietnam War and the progressive international isolation of Israel in the wake of wars with its Arab neighbors in 1967 and 1973, have been tactically very flexible over the past 35 years, but their key principles have remained the same
.................................................................................................................................................................................................
But neo-cons take "man's" capacity for evil particularly seriously, and for understandable reasons. For neo-conservatives, the Nazi Holocaust that killed some 6 million Jews during World War II is the seminal experience of the 20th century. Not only was it a genocide unparalleled in its thoroughness, the Holocaust also wiped out family members of hundreds of thousands of Jewish citizens in the United States, including, for example, close relatives of the parents of Deputy Defense Secretary Paul Wolfowitz.

For neo-conservatives, as for most Jews, the Holocaust represents absolute evil, and the factors which contributed to the rise of Adolf Hitler in Germany and the subsequent extermination of Jews must be fought at all costs.

"The defining moment in our history was certainly the Holocaust," Richard Perle, a key neo-con and leading advocate of war with Iraq, recently told BBC's Panorama. "It was the destruction, the genocide of a whole people, and it was the failure to respond in a timely fashion to a threat that was clearly gathering. We don't want that to happen again, and when we have the ability to stop totalitarian regimes we should do so, because when we fail to do so, the results are catastrophic," he said.

For neo-conservatives, the 1938 Munich agreement, under which Hitler was permitted by Britain and France to take over Czechoslovakia, is the epitome of appeasement that led directly to the Holocaust. As a result, Munich and appeasement are constantly invoked in their rhetoric as a way to summon up the will to resist and defeat the enemy of the day. Hence, almost every conflict in which the United States has been engaged since the late 1960s - from Vietnam to Central America to Yugoslavia to the "war on terror" in Iraq and against al-Qaeda - has been portrayed as a new Munich in which the enemy represents a threat virtually on a par with Hitler.
..........................................................................................................................................................................................................................................................
Finally, US engagement in world affairs is absolutely indispensable in preventing catastrophe, according to neo-con ideology which, in the words of another Perle intimate, Ken Adelman, sees "isolationism [as] the default option" in US foreign policy. Indeed, many neo-cons, fearing that the Cold War's end would revive isolationism, spent most of the 1990s hawking policies designed to maintain Washington's international engagement, even if that meant supporting Clinton when he deployed troops abroad.

Why? If evil is embodied by Hitler and similar threats, the United States comes as close to moral goodness as can be found in the world today, according to the neo-cons. "Since America's emergence as a world power roughly a century ago," Elliott Abrams, another prominent neo-con who currently serves as the top Middle East policymaker on Bush's National Security Council, wrote in a Commentary colloquium in 2000, "we have made many errors, but we have been the greatest force for good among the nations of the Earth. A diminution of American power or influence bodes ill for our country, our friends, and our principles''.
..........................................................................................................................................................................................................................................
Similarly, during much of 2002, countless neo-con columns and editorials in the Post, the Wall Street Journal and the neo-con The Weekly Standard (edited by Irving Kristol's son, William) cited a wave of attacks against Jewish targets across Europe, almost all of them carried out by Muslim immigrants or their children, as evidence of a resurgent anti-Semitism distinctly reminiscent of the 1920s and 1930s. "The whole of Europe is sick," wrote Paul Johnson, an English neo-con, in the Journal, while, in one of his milder remarks, Perle accused Europe of losing its "moral compass" over Iraq. Robert Kagan's much-celebrated depiction of Europeans being from Venus and Americans from Mars is an even milder version of the same basic worldview: compared to forthright, masculine Americans, Europeans are passive, decadent and unwilling to stand up for what is right.
.....................................................................................................................................................................................................................................................
If anti-Semitism can be tolerated under some circumstances, however, the security of Israel remains a fundamental tenet of neo-conservatives who traditionally supported whatever Israeli government was in power but, since 1993 and the Oslo peace accords, became much more closely identified with the views of the right-wing Likud Party, which opposed the agreement. The neo-conservative identification with Israel can be explained in part by its predominantly Jewish membership, but Christian neo-conservatives very much share the sense that a strategic alliance with Israel constitutes a moral imperative in the post-Holocaust era. As Catholic neo-con William Bennett wrote in a recent book, "America's fate and Israel's fate are one and the same."

This commitment to Israel also explains the willingness of Jewish neo-cons to overlook the anti-Semitism of their Christian Right allies, whose own identification with Israel is based on a "Christian Zionist" reading of Biblical scripture that recognizes a God-given right of the Jews to what both religions consider the "Holy Land", at least until the Apocalypse and the Second Coming of Christ. Kristol and other leading neo-cons have long argued that other Jews should not be offended by this alliance. "Why would it be a problem for us?" he wrote some years ago. "It is their theology; but it is our Israel."


(more...)