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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: t2 who wrote (13708)	1/3/1999 1:45:00 AM
From: Jake0302	Read Replies (1) \| Respond to of 74651

Hi Tech 2K Thanks for your post. To tell you the truth, I don't know much about technical analysis, though I see it mentioned all the time on Internet message groups. I suppose it is stochastics, price channels, etc, etc. Were you referring to my quoting the CNBC bit on "cup and handle?" Is O'Neill's How to Make Money in Stocks considered TA? If so, I see what you mean. I think it boils down to psychology and emotion. In fact, the dependence on numbers and charts and technical analysis is a way to put a scientific face on an essentially human issue, to put numbers to elements of fear and greed. Regarding the Dow Transports, I think that Michael Murphy of the California Technology Stock Newsletter (I looked at a free trial issue, but didn't subscribe) is onto something when he says to think of the market as Old Economy and New Economy, instead of the normal demarcations set up by Wall Street. We are seeing a rotational move from the Old to the New. Notice that the exception to the Transport's underperformance of the market is Federal Express... because Barrons said that it was a cheap Internet stock. But FDX has been written up in Wired, and is in fact included in the Wired 40 index... I knew that all along (and own it, happily). Look at the Nasdaq... up 39% v. S&P up mid 20s, and Dow up 16% in 98. I expect more of the same: technology lead movement in 99. Not necessarily EBAY up another 1400%... maybe alot of new names... or old ones (GE, AIG, C) that crack the technology nut faster than their blue chip peers... but Information Technology is the key Market Breadth... it would be nice to see the small caps catch up. I have a small cap I would like to see move up a lot. But the market is driven by MONEY. Liquidity is the name of the game. 401k money. Pension fund money. Mutual fund money. Kuwaiti Sheik I have 500 billion dollars and where in the world do I put it money. And where do you put it? In GE... and MSFT... and INTC... CSCO, WCOM... stocks that have earnings growth, dominant market position, etc, etc. You don't put it in t-bills... not if you want your job. If we have a stable economic situation, then it becomes safe to put it in small and mid caps that have great prospects... but until then, well follow the herd. I like Joseph Abby Cohen too. Supertanker America, she calls our economy. That is apt. It has momentum, and it is hard to push off course... which is up... not in a straight line, but generally up. I'm in law school, and in a patents course our professor pointed out that someting like 70% of the basic technology research conducted around the world is in the US. Most of the remainder is in Europe. Look at companies like MTC and LU, which crank out patents and intellectual property on a regular basis. That is the real wealth in our economy, and it is growing, and not stopping any time soon. I think the MSFT trial will shake out favorably for our heros in Redmond. I am looking for a sharp move leading up to earnings (and a split announcement) in mid January.

To: t2 who wrote (13708)	1/5/1999 5:17:00 PM
From: mauser96	Read Replies (1) \| Respond to of 74651

The Dow theory was invented in the days when the railroads carried most industrial products. The theory was that if companies were making a lot of goods and profits the railroads should have lots of shipping volume and profits, so the transports should confirm actions of the industrials. Today the DJTA has a lot of airlines, goods are carried by truck etc. so the underlying theory isn't valid. Despite this it seems to work more often than not. Market breadth means that most stocks are going up rather than averages being pulled by a few big caps. That becomes important if you own small cap rather than big cap stocks. Historically wide breadth ( a good A/D line) has been good for the market. In the last few years computers have allowed big companies to get ever more dominant so the value of this may be changing. IMHO, since the market is an auction mechanism, the fundamentals aren't important. What is all important is market participants perceptions of those fundamentals. Anybody who has spent much time at auctions knows that one week chinese vases may bring top dollar, and a year later the same quality vases are hard to sell. Nothing typifies the saying that "beauty is in the eye of the beholder" more than the stock market.