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

To: Cary Salsberg who wrote (46113)	5/2/2001 7:19:08 PM
From: Katherine Derbyshire	Read Replies (4) \| Respond to of 70976

IMO, the slowdown resulted from a combination of inverse wealth effect (Internut bubble burst) and the effects of higher interest rates. >>What are the technology drivers that will return the Nasdaq companies to profitability and allow the index to move up without renewed bubble valuations?<< Right now the Nasdaq is right about where it was in August 1998. To argue that the index is still overvalued at this point is to argue that stocks were sooooo overvalued before the LTCM crisis that 2.5 years of robust economic growth still hasn't been enough for earnings to catch up to valuations. In essence, you are arguing that the economy as a whole is worth less now than it was then. But that just doesn't make sense. The Asian economies are healthier than they were, millions of additional people have bought cell phones and connected to the Internet, and Moore's Law has made computing even less expensive. The "pathetic" equipment bookings in March 2001 were still almost triple the level in August 1998. Meanwhile, even after my dot.bomb losses, even given a far shakier employment landscape, I'm still in a far better financial position now than I was then. I'm more able to buy stuff (fueling economic growth) and more able to invest (sending the market up), and I suspect I speak for millions of other investors. No, I don't expect the Nasdaq to move up like it did in late 99 to early 2000. It's quite possible that we won't see another market like that one in our lifetimes. But I think the risk/reward equation favors the longs at these levels. Katherine

To: Cary Salsberg who wrote (46113)	5/2/2001 8:45:02 PM
From: Jerome	Read Replies (1) \| Respond to of 70976

What are the technology drivers that will return the Nasdaq companies to profitability and allow the index to move up without renewed bubble valuations? The big technology driver will be unit growth. It makes no difference if this unit growth comes from computers, cell phone, PDA's games, MP 3 players, or MSFT's X box. Likely it will come from an area that we are not now giving much consideration to. >>>without renewed bubble valuations<<< In any 10 year period of stock market time there will always be some area of the market exhibiting a bubble valuation. So there is no protection against that one. Like a kid with a bubble wand, while some are bursting overhead, new ones are being formed by his breath. Some posters have read about the great depression and its effect on the stock market. But during those three years 1929 to 1933 some stocks rose nicely. It was the bubbles that got destroyed. (gold and silver stocks) Jerome

To: Cary Salsberg who wrote (46113)	5/4/2001 12:55:24 AM
From: John Trader	Read Replies (1) \| Respond to of 70976

RE "It is normally a given that it is better to be bullish at lower levels than at higher, but I think that looking at levels without considering business fundamentals is foolish."... I agree with that, but don't assume that I am not considering business fundamentals. If you mean current fundamentals, well my response to that is the market is a discounting mechanism. Stocks tend to rise prior to an economic recovery, so I am looking ahead. I am not the only one with this point of view. To quote Briefing.com this evening: "Has the sector moved ahead of its fundamentals during this rally? You bet... But that is always the case at turning points... Consequently, investors shouldn't wait for a big correction to make the market cheap again... It's not going to happen... Institutional investors will use any dips to increase exposure to the market/sector for fear of underperforming yet again" Regarding whether the slowdown or excesses caused the tech debacle, I would say both did. Another way to put it is to say it was caused by human nature. The same human nature that tends to make people reluctant to buy when prices are low. Regarding "disdain for valuations", that is not true. I just think the valuation placed on the stocks is something the market decides, not something that you or other bears can decide for it. There are a lot of different approaches one can have in this market. I go out of my way to study the bear arguments, and they have influenced me. I find a certain amount of validity in them right here and now. But whether I am bullish or bearish is my own call to make. Also, some pretty outstanding investors (e.g. Buffet, Lynch) have argued that one should not try to time the market. I am not buying AMAT at these prices, I am just holding. Regarding the general mentality, I think it is more bearish on techs here than bullish. So by being bullish on tech here, I feel that I am the one who is going against the crowd. I really don't want to argue about all this. It is fine to be bearish on techs here. You can short AMAT or the QQQ if you want and maybe you will do well with that. But one also has to respect the other point of view. I agree techs should be lower in value now, as should the whole market - in an ideal world that is. The question is whether or not we are actually going to those levels, or going much higher instead. I see lots of postives here, so I think a year from now the Nasdaq will be a fair amount higher. If you can't see any positives with this market at this point I think you need to look again. But all this is just my opinion, and I could very well end up being wrong. Good luck, John