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Dow has made no net movement in 9 months... As for Naz, it seems Dow stocks are
hit as badly by rate jitters than Naz. It is not that the Naz is the badie, and
Dow the goodie... They are all getting the same treatment, so what's the point
owning old blue chips, if downside is same and upside is limited?
If fund managers want to have performance, sooner or later they'll come back to
where the growth is. Even more so in a high rate environment which will make a
hell of a difference for GE, much less for JDS Uniphase. It is also to be noted
that in a high rate environment, low margin or old world businesses will be even
more pressured to reduce costs, and will invest even more in tech to achieve
that...
In any case consensus never works, and right now consensus is Tech is too high,
rates are rising, inflation is looming, value is undervalued. I don't know which
way things will go, but for sure it won't be the above.
Just food for thought
Gwenn
Daniel Goncharoff wrote:
> ..which was the last trough. I think the bearishness is easily explained by
> the breakout of the Naz over the past three months. It has to stop sometime,
> and once that happens, it will probably restrain the Dow around it.
>
> If the Naz dropped 100 points a week for the next 4 weeks, that would only be
> a slight correction, and the Dow only has to hang out in the 11500-10500 area
> to allow for some convergence.
>
> Regards
> DanG
>
> G
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