To: Giordano Bruno who wrote (8321 ) 3/16/1999 9:36:00 PM From: Casaubon Respond to
In general, these stocks (see links below) fit into a speculative growth category. What it looks like to me is that they got carried along in a runnaway bull market and were the first wave casualties when the wind got knocked out of the bull. As the gas is let out of this balloon, I believe more and more stocks will find themselves resting at levels similar in value to their early 1997 prices. I think the reason for this is during bull markets, stocks get priced based on expectations further and further into the future. By examining the results of last octobers set-backs on the most vulnerable stocks (which I'll define as speculative growth stocks), I believe we get a realistic look into the market psyche. Those stocks all offer the promise of future earnings; the amount of excess price reflects the degree to which the bull market was foward speculating. When reality hits the bull, these types of stock react first and violently. The receding A/D line is the rest of the market falling in line with the reality those "growth" stocks have already faced. The last stocks to face reality will be the "hype" stocks followed soon thereafter by "the safe stocks". iqc.com iqc.com iqc.com iqc.com iqc.com iqc.com
