Forum Archive Index - April 2000

[Derek Watt <dkw@paradise.net.nz>]

-Most shares on the Nasdaq are 30% off there highs.

-America is about to enter a 4-6 year recession according
to many economists.

-What happens in the US rubs off strongly on the NZ market.

Microsoft lost in court, the Nasdaq went down then
recovered very strongly. This seems to be a sign that 
a plumet in the Nasdaq is still some time away, but
IMHO it is just the first bounce of what will become an 
increasingly sick cat.  Interest rates will keep rising
in the US until there is a major correction. There seems 
to be no further justification of further large increases
in the IT sector as most shares are already at high multiples 
of earnings, assets, projected future earnigs and any
other measure of value that you care to mention with one
exception: What some other crazed e-share junkie is prepared
to pay for them.

Since future expectations of further share price
rises is already built in the price of the shares, with 
little further upside there is only one way the market will
go (down).

This doesn't seem to be happening to the same extent for NZ IT
shares, for example there seems to be little of the what-some-
other-idiot-will-pay factor in the price of ITC shares.

While it seems very likely that NZ IT shares will rebound
in the very short term (especially ITC), IMHO anyone buying
into the IT shares now should have a very low % cutoffs for
their stop-losses.

I bought in '87 after the market slumped, but then it 
just kept on going down. I'm not going there again.

I'm out of IT except for small holdings in AQL (whats the 
point of selling now?) and SPE (waiting for further news) but
would buy ITC monday morning for a short term play if I had
any spare money.

Derek



-----------------------------------
Derek Watt
http://members.tripod.com/DKWatt/
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