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

To: John Trader who wrote (55333)	11/11/2001 12:11:22 AM
From: Jacob Snyder	Respond to of 70976

Yes, the volatility truly has been spectacular. And, I think, even if the market goes sideways from here, it will be within a very wide range, a range where the top of the channel could be as much as twice the bottom. So, for instance, I could see the Nas ending 2002 exactly where we are now, but hitting both 1200 and 2400 between then and now. And the opportunity that presents, is not at all theoretical. And, yes, I agree that the stock market is Efficient, with the caveat that it is only efficient in the long run (3+ years, at least). Over time, the change in stock price (for any company, sector, or market) is exactly proportional to the increase in earnings. (real earnings, with dividends and change in # of shares added into the equation.) But, on a time frame measured in <3Y, the market is ludicrously inefficient. Watching NTAP go from 152 to 6, in less than 12 months, and then have a near-tripling off that recent bottom, it's hard to believe the stock has any connection at all to the company's future profit stream. Sure, the prospects for future earnings changed in that time. But not by that much. I, too, Believe in technology. But, a lot of tech companies have unsound business practices (I know you are very aware of this, but many of our fellow investors aren't, and they can support a stock price at unreasonable levels for an unreasonable amount of time). And/or have unproven business plans. And/or are cyclicals (a fact that managements and investors may not realise). And a lot of tech companies sell commodities. And the few that don't fall into one or another of these catagories, have stocks that are usually over the top end of "normal" valuation ranges (whatever that is). If it isn't Efficient, that makes it very interesting.