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To: JRI who wrote (119034)	4/19/1999 9:55:00 PM
From: BGR	Read Replies (3) \| Respond to of 176387

John, Mid to high teens PE in technology means, for one, the internet boom is over. I do not mean the stock boom, I mean the business boom. Imagine, for example, AOL with a PE of 15, which means a equity price < 10. That will drive away every single venture capitalist out of the internet arena. But, at the same time, the business is too lucrative, so somebody is going to step in, if not speculators then owener-managers via LBOs. Mutual funds have to be crazy to force things in this direction. Next, the non-tech internet: Let's consider the sectors individually. S/W is almost there already. Networking is too closely linked to the internet. Semiconductors just have to have a great future if S.E. is coming back as it is inconceivable that those countries will buy in abundance from CAT and not AMAT given their traditional business strength and focus areas. H/W, well that's a multi tier sector now. If DELL continues to grow in the 40's and 50's and gets cut down to a PE of 15 (price of 12) that's unsutainable unless 5 days have completely changed the market's attitude towards growth stocks in general. IMO, this is more program driven than anything. Now, the DOW sellers have geared up too (saw that nearly straight line decline around 1 and again later). So where is the money going to go? Bonds are out if inflation's around the corner. Foreign markets are too small to absorb the retirement investment that US produces on a semi-monthly basis. So, what does that leave us? -BGR.

To: JRI who wrote (119034)	4/19/1999 9:56:00 PM
From: stock bull	Read Replies (2) \| Respond to of 176387

John, the reason for my pessimistic market call is based on the following: > The fall in the market is due to the sector rotation that we are all familiar with. Its not like last Oct when the global situation was the reason for the markets drop. > You have large Mutual Funds dumping shares valued in the billions of dollars. Guess you heard the Fidelity Magellan started selling a few weeks ago. Others are selling as well. > The y2k issue will not be resolved within a few weeks. IMO, it will take until the end of the 3 quarter to see how this issue is resolved. > The MM are now "convinced" that the growth has left the tech sector. I don't think they'll change their minds until they see a few quarters of growth once again. Your comments are appreciated. Stock Bull