Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Jim McMannis who wrote (79720)	5/8/2002 12:24:28 PM
From: tejek	Read Replies (1) \| Respond to of 275872

RE:"There's a big difference. The bubble in the Naz has been punctured.......there may be some residual hangover but the worse is over. Your cassandra view applies only if the Dow is a bubble as well." The DOW of today doesn't exactly look like the DOW of '29..but that's the $64k question. Do the DOW and other current bubbled fall off too? First, there's not a bubble in the DOW. Many DOW stocks are richly valued but nothing like the Naz at its peak. However, the stocks in the DOW that are ramping are mostly the small and mid caps. Its these stocks, usually cyclicals, that are feeling the beginnings of the turn in the economy. Many of them have trailing PEs that are low, or have good justification to expect that forward PEs will be low. As for apples to apples...Sure the DOW is not the same as the NASDAQ but one might figure out that in 1929 there was no NADAQ and bubble wise the DOW was equal to todays NASDAQ. The chart parrens are so close it's scary. I say.......so what? First, the Naz is a much smaller market than the DOW with a commensurate much smaller impact on the economy overall. Its only because of the unbelievable tech bubble and the surrounding hype in the late 90's that gave the Naz the appearance of being the center of the universe. Secondly, like I said earlier, the Naz bubble has been popped. The ramifications of that popping have already been felt in the economy. Sure the Naz can go lower but there are few people still holding JDSU or PMCS when they bought them at their bubble prices in the hundreds of dollars. They mostly took their pain and are over it. Now if the Naz goes lower, its mostly people who bought JDSU at $8 or PMCS at $17 who will feel the pain. There is a big difference in a drop from the $100s and a drop from $8. Naturally, none of this is good, but there is no reason to think at this point that we are heading for a 1929 style crash. Of course, all bets are off if Hamas sends a suicide bomber into Chicago! ted