article for Shekky - overpriced tech stocks

[Vermont's Finest]

http://money.cnn.com/2002/01/14/investing/q_valuations/

[Dr T Non-Fan]

Um, aren't there a lot of stocks that don't exist anymore since march 2000? And wouldn't that skew the article's implications? I mean, these companies won the battle of the "bulge" and deserve the pricing that less competition brings.
Right?

[Vermont's Finest]

I guess that's one possible interpretation....but not one that I'd bank on. You must be banking on a tech rebound.

[The Diabolical Biz Markie]

Since the nasdaq is a volume weighted avergae, that shouldn't make a difference. The existence of individual companies is of secondary importance. You have a set a companies which has a combined market cap and combined earnings. Those earnings don't justify the market cap.

What I find odd about this resurrected tech-bubble is that all the media are talking this one DOWN, as opposed to when the Nasdaq hit 5000, and people were wondering if it would hit 10,000.

[aNoNo]

On 2002-01-15 12:35, Shekky Tree wrote:
Since the nasdaq is a volume weighted avergae, that shouldn't make a difference. The existence of individual companies is of secondary importance.


Hello ST - did you mean the NASDAQ is "market value weighted" rather than "volume weighted"?

What does "volume weighted" mean in this context.

Just curious.

[Vermont's Finest]

Shekky,

What's your latest take on the market? I had hope for a couple days as the market dropped....but then all the idiots pushed the market back up again.

My prediction: the DOW peaks near 10,800 & NASDAQ around 2250 before both come crashing down again, settling in around 8200 & 1400, respectively.

Since the market is irrational, can't give any prediction of WHEN this will happen....

[The Diabolical Biz Markie]

I agree that it has a crash coming....and I agree that it is not possible to predict the timing.

The strange thing now, versus the heady nasdaq-5000 days is that you NEVER used to hear a loud, sustained bearish chorus in the financial media. You had people making all sorts of ridiculous assertions about Dow 36,000 and whatnot.

Now, by contrast, I hear a lot of people in the financial press naysaying the market. I would think that this would have depressed interest in the market, but it still chugs along...down 1%...up 1%....down 1%....up 1%.

I think that the wave of bankruptcies is part of the natural phase of the credit markets, and that what SHOULD happen now is that lenders, having been burned by bad loans, make it a little harder to get money--Alan greenspan and the printing press notwithstanding. The money that enron owed people was REAL money. It DID appear on balance sheets somewhere...and now it is gone. That bankruptcy, along with many other corporate bankruptcies, should help contract the money supply a little, which should contribute to the bursting of the stock bubble.

I really WOULD like this to happen soon, because going long is a lot less stressful than going short.

Part of me thinks, though, that it is possible that the market would just go nowhere for 5-8 years until the fundamentals caught up with the stock prices. For some reason, I still tend to doubt this will happen, but I suppose it could...