Forum Archive Index - September 2000

[jesse <johne777@hotmail.com>]

Hi Brian
I know your not a big Nasdaq fan but youve generalized things a
bit...eg...'That market is driven by price and I suggest that the
majority of private investors/traders wouldn't have a clue as to P/E or
any other indicators.  If the price is going up that is a good share to
have -nothing else.'
I'd say Nas traders know more about their stocks (including p/e) than
NZSE investors do about their NZ stocks, simply because more info is
available and Nas traders usually have a core of stocks that they move
in and out of frequently, and know them in detail.
Now if you said Nas traders dont put much weight on P/E when selecting
stocks, thats closer to the truth, but they still know it. I know quite
well if I want to trade EBAY that its P/E is over 1000, or CSCO about
140, thats why I trade it and dont hold it. And not just trading on
momentum, could be a host of reasons, earnings, split, news, futures,
charts etc.
As far as other indicators, come on Brian, you know that most traders
use technical analysis over fundamentals, so a Nasdaq trader will be
more familiar with a stocks indicators than a long term holder.
Brokers pumping stocks...happens everywhere.... sure, probably moreso in
US, more brokers, more cowboys.
Nasdaq coming back....theres actually two questions, when and by how
much?
Agree you cant compare our market with US, but, one can still impact on
the other and, IMHO does. Just look at the sell off in April, did we
brush it off or fall with it? The fewer offshore investors we have in
our market though, the less effect they have on NZ market. Most
investors Ive chatted with, with offshore stocks, say that when things
get tough, they reign in their offshore assets first. I see Nasdaq has
been off last 2 weeks and maybe  just a coincidence that NZSE is
drifting back to 2000.  Trouble is, when foreigners sell and dont come
back in, our market struggles to regain losses. Think thats holding back
NZSE for sure, we need more offshore $, like it or not. Speculators or
traders, provide liquidity. Same in any other market, currency, bonds,
whatever. Take away the traders and you have a predictable, slow moving
market. Unpredictable markets help attract additional traders, more
liquidity and so on.
Its that same unpredictable, uncertain element driving Nasdaq prices.
When you get a big swing in opinions on future earnings, your going to
get variances in values, expectations etc. Its the perfect recipe for a
volatile market. Every now and then some analyst will say stocks are
overvalued and things cool off...then its oversold so it rallies and so
on. You should dip your toe in the Nasdaq waters Brian, you'd love it,
frayed nerves, knotted stomach, etc etc. HaHa. 10% of your portfolio in
US growth stocks would compliment the more divi style local stocks
nicely.
jesse


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