Bubble trouble legion12/28/2023 So what’s it like living among the carnage of the 52-week-low list? At first, I found it quite lonely and depressing. There was Todd-o Harrison, our head trader, once again exhorting us to buy them when you can, not when you have to but once again Jeff Berkowitz and I, stunned at the declines, began to worry about what Monday would bring. ![]() Friday, however, was just so ugly, so hideous, that tension among us roared back to that Terrible Tuesday level, where I demanded that maidens be thrown into the volcano to please the gods of trading. All week we had avoided committing our excess capital, making us heroes in the eyes of our investors. Sure, we didn’t feel all that constructive buying into the morass. Leave it to the professionals to panic while the non-leveraged do-it-yourselfers plow 401(k) money in and pick off the pros’ cast-offs at great prices during Friday’s lows.įor much of the down market, we felt that the action was actually constructive. As it turned out, of course, no mass redemptions came, and these same managers scrambled right back in once the mail brought more money in over the weekend. These stocks bottomed two Fridays ago, in the teeth of the sell-off, when every mutual-fund manager was scared to death of redemptions and was busy whacking out the best names to have cash to meet them. Some would say that, during the fall, the high-quality Nazzdogs, the ones with the fancy pedigrees and the good earnings, simply got hit with a wet bucket of ice-cold selling, or maybe just a dollop, or, in the case of Sun Micro and Oracle, a small splash of the stuff. Oh, sure, no sooner had the Intels and the Ciscos declined 20 or 25 percent than they began to work their way back from the pricey abyss to the extremely overvalued Valhalla. This wreck will block the most important access ramp to all of the new companies that just came public – the ramp to getting more capital once the initial-public-offering money runs out. Nah – unlike the crash of ‘87, this one’s aftereffects will be with us for some time. In 1987, the nasdaq got hit, but it was nothing like the pulverization in April 2000. ![]() In the crash of 1987, we experienced a brief swoon, a rapid 508-point decline that worked its way back to even and beyond in a little more than a year’s time. To which I say, what highway were they on? If you sat at my turret, stared at my computers, and heard the voices on my phones, you would know that crash might have been too sweet a word for the carnage wrought by the massive pileups of sellers packed onto that tiny nasdaq off-ramp. People talked correction, they mouthed pullback, they spoke of sharp decline, a nosedive even, but not a crash.
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