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Earl - unquestionably both your chart analysis and follow-up discourse were
very well done....
and I concur. A drop of this magnitude and duration (we're not through yet
!) is a paradigm shift in thinking AND action: social, psychological, and
most importantly financial. In Tech, the crash has already occurred and is
affecting many, many people that are "techies".
To wit: The 90's had "techies rule". Right now: "techies are
dead.....totally and completely".
Recent stats and anecdotal evidence has over 1 MILLION American programmers
out of work. Recent surveys of tech consulting firms show their "book of
business" or "reqs (requirements)" are DOWN between 70 and 90 percent...
depending on the area of the country. Recruiters are getting from between
100 and 500 resumes PER DAY when a new opening appears. So as far as the
Nasdaq goes, it has already reached 1929 (-90%) proportions business-wise
already. Stock prices of really hi-tech internet firms such as Rare Medium
(RRRR), Razorfish (RAZF), Scient (SCNT) are DOWN 99%+....so they've gone
beyond 1929 in terms of depression.
Because of the tech consulting depression and the complete stoppage by large
corporations of new tech projects, promising new technologies such as Java
and XML are languishing "on the shelf" so-to-speak.
I mention this because anyone expecting a "new technology wave" anywhere
near the proportions of the 1990's is totally and completely without regard
for history as you've pointed out.
The Nasdaq will be the new "slow growth" market of the 21st century.
Boring stocks such as insurance, banks, etc. will be the new growth
areas....
and the highest growth business will be THE FEDERAL GOVERNMENT.
And, social-wise, the tendency towards socialism in the USA will be greater
than ever in the past.
This will have a MAJOR CHILLING EFFECT on productivity and growth in the
USA.
> -----Original Message-----
> From: Earl Adamy [mailto:eadamy@xxxxxxxxxx]
> Sent: Saturday, June 29, 2002 10:35 AM
> To: realtraders@xxxxxxxxxxxxxxx
> Subject: Re: [RT] Investing Now?
>
>
> I don't disagree that fundamentals often have no validity to market prices
> and that they are boring to boot. Markets are not about fundamentals,
> markets are about the cycles of human psychology which range from extreme
> greed to extreme fear. The truly major cycles run quite regularly ...
> roughly every 3-4 generations. There is no great mystery as to the why ...
> the collective memory of the living requires 3-4 generations to forget the
> extremes of the previous fear ... there was a period in the 1930's during
> which investors paid interest (a simplification) to the government for the
> privilege of owning treasury bills. And this is where the
> fundamentals come
> in ... one needs to keep an eye on the broad picture of
> fundamentals because
> they tell the trader/investor how everything fits into the big cycle and
> that provides guidance regarding market risk. There have been investor
> manias for all of recorded history with some of the more recent including
> South Sea trading companies, tulips, and the great stock market bubbles of
> the 20's and 90's. There have been others, of lesser note such as the bull
> market of the 60's led by computer stocks which have not ridden the great
> extremes, but never-the-less exhibit the same swings of greed and fear. It
> is the basic purpose of technical analysis to attempt the measure and
> quantification of fear and greed in the time frame being analyzed
> whether it
> be minutes, hours, days, weeks, months, years, or decades.
>
> My parents vividly remembered and told me stories of the Great Depression
> ... these were people who were comfortable with cash and would never touch
> stocks. I was a hot shot, twenty-something computer entrepreneur
> during the
> 1960's. I became intimately familiar with the view of the
> investment banking
> community of those years which would take any carcass public as long as it
> was named "computer" something and could be kept on a resuscitator long
> enough to extract the 10-15% in various fees to be extracted from the
> public's money (AKA IPO proceeds). Eventually, the computer bubble (and
> Nifty Fifty) burst and we were treated to televised congressional
> investigations, investment bankers vowing to erect "Chinese Walls" (no
> disrespect to the Chinese) between investment banking and retail analysts,
> and hand wringing regulators vowing to fix things. Any of that
> sound vaguely
> familiar?
>
> The major difference between the 1960's and now is that in the
> 1960's there
> was still enough generational memory remaining from the 1930's to mitigate
> some of the excess. As the last great bull market progressed, any
> half-witted student of market history could see that there was zero
> collective memory of the 1930's. The last of the regulations
> enacted during
> the 1930's were being tossed aside in the name of deregulation, free
> enterprise, and the "public good". I vividly remember the congressional
> hearings on the repeal of the Glass-Stegal provisions just a few years ago
> and thinking that the end of the major cycle could not be far off. And
> before Kenneth Lay and Enron there was a guy named Samuel Insul
> who managed
> to construct the greatest corporate Ponzi scheme of the 1920's. It was
> probably no coincidence that the foundations of both Enron and Chicago
> Edison lay in none other than the boring old utility business. Naturally,
> all those old utility regulations passed during the 1930's had since been
> relegated to the scrap heap of history so that energy traders could reap
> vast profits while screwing the public.
>
> To summarize, your dismissal of history and apparent lack of knowledge
> regarding human psychology do not speak well for the quality of your
> educational experience. Not only does the end of the latest great bull
> market have enormous implications for the pocketbook, but it has enormous
> social and political implications. In short, it marks a major
> shift from the
> end of one era to the beginning of another era. In the great scheme of
> things, it matters not where one's personal political and economic beliefs
> fall in the spectrum, it matters that one understand the shifts of the
> cycles. Those who learn from history will understand some of the
> implications of this sea change and be in a position to profit from the
> opportunities of the new era. It is worth noting that some of
> today's great
> family fortunes were built from the wreckage of the 1920's bull market.
>
> Earl
>
> > I am sure your a cutie but I hardly see how history can be related to
> > what is happening in the markets. Our generation has shown the world
> > just a taste of what is yet to come. I think fundamentals look
> > like they have no consistent validity, not to mention they are
> > boring. Maybe someone can make that stuff work, but when I was
> > trading FX some time back you had better pay attention to price
> > action.
> >
> > I watched TV today and they were talking about how all the books are
> > rigged with public corps, so what's the use in using that data? I
> > think you just watch tha tube and whatever they put down you buy and
> > what they tout you sell. Wrong -Right? Logical - Not?
> >
> > thx
> > TG
> >
> >
> >
> >
> >
> > To unsubscribe from this group, send an email to:
> > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >
> >
> >
> > Your use of Yahoo! Groups is subject to
http://docs.yahoo.com/info/terms/
>
>
>
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