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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Captain Jack who wrote (17564)	9/3/2001 2:07:59 PM
From: TechTrader42	Read Replies (1) \| Respond to of 52237

"a bit late to assist Gore" This is such nonsense.

To: Captain Jack who wrote (17564)	9/3/2001 2:36:30 PM
From: Lee Lichterman III	Read Replies (2) \| Respond to of 52237

I will agree that the bubble could have been burst with a little better finness and should have been done so at an earlier time. I believe he should have raised margin requirements and left interest rates as a last resort but he did have to hit interest rates somewhat to get unemployment up as Gersh pointed out. The bubble was not the only problem. We had to get unemployment up and slow GDP to a more sustainable level. TraderX - There will always be trades that can be made, with or without a bubble. There will always be manias also. The problem was/is the extent of the bubble. Being a trader should be a job, requiring study and hard work. By the spring of 2000, we had kids in high school, housewives, Barbera Streisand and Prison inmates all thinking they were wall street gurus because they could scalp a few points everyday. Most mutual funds had the heads of the fund out wining and dining being smoozed by CEOs selling their stock instead of running their businesses while some pimple faced kid right out of college was trading the fund. IPOs were being brought to market based on business plans written on cocktail napkins that had no real chance of ever making money. Wall Street money was so busy chasing pipe dreams, there weren't enough funds to drive real businesses. The misappropriation of funds in this manner is not healthy, even if a few traders are making money. It doesn't help the economy. If that were true, we would all own casinos and no one would take out the trash, build cars or teach our children. For an economy to prosper, you have to have capital going where it is needed, not chasing silly ideas. If you can't figure out what a company does to make money, it is in the business of selling stock. Many of the tech giants made more money selling puts on their own stock, and trading other tech stocks than in their core businesses. We are seeing those effects come to light now. This will never be a boring market. There will always be volatility and news driven ramps and dumps. I actually believe a range bound market is easier to trade than a strong trending one but maybe that is just because my system works better in that environment. It is much easier to sleep at night when you hold a company growing real earnings at a sustainable rate at a matching PE ratio for a PEG of one than holding one that is 20 times book, has a PEG of 4 and has all it's hopes on every poor farmer that can't rub two nickels together buying a cell phone and a router. How quickly everyone forgets how out of hand the mania was. Recall that when the interest rates first went up, everyone said that he couldn't slow down tech because it was a new economy and tech was immune to interest rates. Then they argued that we would bounce in the 3rd quarter last year, then the 4th, then the 1st this year, then the second half and now the Q2 of next year. With earnings falling faster than stock prices we are still running in place and yet no one is willing to admit that fair value is still much much lower for most techs and many of the Blue chips of the DOW. Does 5% long term growth or worse yet flat growth command a PE of 40? Where have the last 3 semi and semi equip down cycles bottomed and where are they right now? Answer subtract about half off of Friday's closing valuations and you will be close. But I know the answer I will get already. I know, I know, it is different this time, this is a new economy and the old rules don't matter any more. Funny I think I recall hearing that before. When was it..... Sometime in the spring of 2000 as I recall..... Good Luck, Lee

To: Captain Jack who wrote (17564)	9/3/2001 3:56:20 PM
From: bobby beara	Read Replies (1) \| Respond to of 52237

WRONG-- he had the bubble burst! There were indications the economy was slowing.>>>> i'll admit i think the last .5 hike was excessive, but we need a little perspective, the nyse A/D line bottomed a one year cratering slide just before that last hike and has been in a bull trend since, and AG's rate hikes had less importance on the bubble bursting than most people think imo, the bubble was constructed on a belief that we were in a new economy and the tech revolution was just in it's infancy, and that tech stocks were bullet proof and that these web companies were gonna put all the brick and mortar companies out of business, investor's believed this so strongly that they margined themselves to excess, believing this was a no-brainer, they bid up money losing companies with unsure business plans to market caps that exceeded whole american industries market caps. after the crash in april 00 (mostly technical, imo), i think investors started seeing these ipo's bent on running out of cash, first the dot.com's bleed, then that spilled over into the rest of the tech suppliers, who lost a big customer base, plus at that time the market for computer's in business (y2k) and the public was getting saturated yadda yadda, so the previous bubble expectations started to evaporate, and so did the bubble, investor's had become to believe that the tech revolution was in it's infancy, just as it was reaching maturity. interest rates and fomc are convenient scapegoats, but the bubble inflated despite rate hikes, and it is collapsing despite rate drops. b