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.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: KENNETH R SANDERS who wrote (44273)	1/22/1999 9:28:00 AM
From: Earlie	Read Replies (1) \| Respond to of 132070

KRS and gang: Ken, loved your comment. (G) A nasty bearish thought. For weeks, the analysts couldn't say enough wondrous things about the soaring internet stocks, Why? Because the stocks were going up and the analysts hate "not being there". They also can't afford not to be there ("You idiot, why didn't you see this coming,....you're supposed to be a tech analyst, and you've just COST ME a fortune because I didn't participate...." etc.) As a result, a bunch of arcane rationales have provided at least a tiny thermal to support the ascent. The real reason for the ascent is that an army of "E-traders" (who openly state that they neither know nor care what a company does), created a nice bit of momentum, and the momentum funds joined in. With minuscule "floats" (actual stock available for trading), the thing took on a life of its own. At the brokerage houses, (particularly the internet discount houses), the credit managers started adding up the possible liabilities and had heart palpitations. With little adieu, margins were reduced overnight, which caused the first big washout. It would be interesting to know whether some of the larger firms provided an enthusiastic nudge to the margin requirements, not just to protect their own financial well being, not just to enhance the value of their in house short positions, but to increase the financial pressures being experienced by the internet (discount) houses which were already suffering consequential (and acknowledged) defaults. Probably not. (g) One thing for sure is that the "buy-the-dippers" are taking it in the teeth on this one. The horror stories are rampant. As noted earlier, the dippers replaced the shorts as a "cushion" beneath this market, and the probability of a major crunch was minimal while they remained cocky. The losses sustained already, may ensure a less enthusiastic response to future "buying opportunities" Best, Earlie.