On 3/20/00 fivehawks made the following statements which cover everything and nothing.
He stated -- "1) The Nasdaq is ridiculously overvalued. I think certain sectors will lose 80-90% of their value. I JUST DO NOT KNOW WHEN. FURTHERMORE, PRICES COULD DOUBLE FROM HERE PRIOR TO THE DECLINE BEGINNING. In other words, I think free cash flow is much too confident that the Nasdaq will not reach 6000. However, the larger the bubble gets, the bigger ultimate fall will be when fundamentals return to the market."
The Nasdaq has rebounded 20% from its low. The Dow has rebounded 10%. Both are down 6% year to date. In other words, both demonstrate volatility commensurate with their inherent risk.
If fivehawks is buying Biogen, a stock in one of the most "overvalued" sectors of Nasdaq, he doesn't listen to his own rantings about "certain sectors will lose 80-90% of their value."
Thank you for your thoughts on the biotechnology sector. Fortunately, I did not buy the whole sector, just Biogen. Biogen has $700 in cash, virtually no debt, has made $1.88 per share over the past 12 months, and I bought more in the mid to low 50's.
It is becoming clear to me that you are someone that happily twists facts in any way to suit your arguement. You quoted my post of 3/20/00, but only in part. The next sentence in my 3/20/00 post, which you left off, read: "The dow will not lose anything near what the nasdaq will lose. Many of the "old economy stocks are attractively priced currently".
You can twist the facts and play your word games all you want, but my basic points were very clear:
1) The Nasdaq was ridiculously overvalued. 2) I had no idea how big the bubble would get before it would burst (as it turned out, not much bigger) 3) The Dow would hold up much better that the Nasdaq.
I posted on 3/20/00. At the close of market Friday the nasdaq had dropped 17.3% since my post, while the Dow had rose 1.1%.
So go ahead stockholderblather, quote my post out of context, provide comparable performance numbers for the nasdaq and dow for periods that had nothing to do with my prediction, twist away buddy. You can feel free to waste you own time, you are not going to waste any more of mine.
"1) The Nasdaq is ridiculously overvalued. I think certain sectors will lost 80-90% of their value. I just do not know when. Furthermore, prices could double from here prior to the decline beginning. In other words, I think free cash flow is much too confident that the Nasdaq will not reach 6000. However, the larger the bubble gets, the bigger ultimate fall will be when fundamentals return to the market.
2) The dow will not lose anything near what the nasdaq will lose. Many of the "old economy" stocks are attractively priced currently. While a meltdown in the nasdaq very well could bring the whole market down, another possibility is a massive sector rotation, where money fleeing from the nasdaq could flow to the currently unloved sectors of the market. We saw some of this in last weeks market. Nonetheless, even in a complete meltdown scenario, the Dow would lose nowhere near what the nasdaq would lose."
The above passages cover most of Fivehawks non-predictions.
Fivehawks has a clear grasp of the obvious. The Dow is a far less volatile indicator than the NASDAQ Composite. The Dow's components have huge market capitalizations and its 30 members have well diversified operations. The Dow is a price-weighted index. Many argue that price weighting is out of date. After all, the market is market weighted.
Meanwhile, the Nasdaq Composite has over 4,000 members. Some, like Microsoft, have huge market capitalizations and can easily swing the index. Most are very small and have little effect on the daily composite figure despite their own huge price swings. The Nasdaq is a market-capitalization weighted index. Microsoft is over 6% of this index of over 4,000 members. But it is merely 3.5% of the Dow 30.
All told, Fivehawks is confident the Dow components are less likely to crash and burn than members of the Nasdaq Composite. Wow. What insight!
And as for Fivehawks comment about buying Biogen, well, based on his statement, I'm sure his overall position is underwater.
Thus, Nasdaq performance can be skewed by the movements of a few large stocks. The Dow isn't so vulnerable.
Further, Fivehawks alludes to "sector rotation" as a flow of capital from the Nasdaq to the Dow. Sorry, that's not sector rotation, since the same sectors are represented to some degree by both indexes. But there are no small-cap issues in the Dow.