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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Jerome who wrote (52369)	5/6/2001 4:30:24 AM
From: Jacob Snyder	Read Replies (3) \| Respond to of 77399

Short-term, about the only thing I'm sure of is continued volatility. Even more than last year, the stock market seems like a casino. Most of the techs I follow have been repeatedly ignoring company and sector-specific news. The macro picture, and violent swings in sentiment, are doubling (or halving) stock prices, in a way that seems random to me. Until the Fed meeting, the momentum seems up. And momentum seems to be the investment style suddenly back in fashion. With everyone expecting the most favorable possible Fed action (1/2% cut), I don't see a shortterm ramp after 5/15. This and 10 pesos will buy you some lukewarm instant coffee in a styrofoam cup, at any Mexican airport. I can construct reasonable, possible scenarios for the Nas ending the year at 3500 or 1000: Nas 3500: The Fed lowers rates in 1/2% increments, all the way to 3%, and keeps the liquidity spigot on "gusher" setting. Inflation is held in check by low import prices (the dollar stays strong), and by gently rising unemployment. A technology company you've never heard of introduces a new product everyone suddenly needs, igniting a rally in tech stocks. There are no "exogenous shocks" to the market. Neither the Chinese nor the Shrub do anything too stupid. The 2T$ in sideline money decides it's now safe to be in stocks again. Nas 1000: Inflation in wages and energy cause continued pressure on corporate profit margins. The CPI hits 4% by September 2001. At that point, the Fed quits lowering rates, and goes to a neutral bias. As unemployment goes up, and profits continue down, there is a sudden tightening in credit standards, as banks get much more worried about consumers and businesses ability to service debt loads. Consumer spending falls off a cliff in the last quarter of 2001, as sharply as corporate spending declined in late 2000. U.S. imports fall sharply, causing political turmoil, currency devaluations, and debt defaults in (______). (fill in this with your choice of any 3d world country). With the Nas at 1500, a large hedge fund goes under, and a market panic combined with margin calls drives the Nas to 1000 the next day.