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Technology Stocks : Discuss Year 2000 Issues -- Ignore unavailable to you. Want to Upgrade?

To: C.K. Houston who wrote (1407)	4/8/1998 6:05:00 PM
From: Quad Sevens	Read Replies (2) \| Respond to of 9818

Y2k costs will not be a stock market panic factor, part 2: The market cap of the S&P 500 is 8.7 trillion dollars. Suppose each company in this index spends, on average, 300 million on y2k (that's a high estimate). That gives us 150 billion for these 500 companies alone. 150 billion/8.7 trillion = 1.7 % Spread over 2 years, and given that y2k spending will in large part be taken out of existing IT budgets, the effect becomes smaller. As a percentage of yearly revenues, the effect will of course be larger, but not drastically so. Again, y2k rates could skyrocket as time marches on and the deadline doesn't. But it looks like real panic will not hit until it's obvious the necessary funds can't be spent in time. When will that be? Wade