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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Bruce Brown who wrote (81613)	8/30/2001 11:15:06 AM
From: Doug	Read Replies (1) \| Respond to of 99985

B.B: Thx for the elaboration. Certainly there are veins of gold amongst the pile of tech. rubble. The Tech Investors are themselves to blame for the current situation. The current valuations are exceedingly high . They remain that way because Investors are clinging to hopes of a quick earnings recovery/turnaround. Based on that hope, the majority of those Investors have not collapsed their Tech holdings/Funds. A sell off , would have enabled the Techs to drop to historical bear market valuations. There is a glut of design /manufacture capacity compounded by overstocked Inventory and uncollectable Receivables This excess can only be eliminated by either dumping , write offs or planned shut downs thru mergers. Dumping and write offs have not been able to stem the glut. The solution is thru M&A. Unfortunately, the TECH investors by keeping the TECH valuations so high make it impossible for Companies to attempt a merger thru purchase. This means that the effects of the glut will be very protracted , perhaps extending out to three years or more. In brief , I see little chance for any meaningful rise on the NAZ as the current prices already have built in sky high earnings expecations which will at best be realized 2-3 yrs downstream. As you point out , there are fortunately other non-tech veins of gold amongst the cloud of dust. Good luck.!