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[P]
Government deep-sixes the NASDAQ?

By End in News
Tue Apr 04, 2000 at 03:13:30 PM EST
Tags: etc (all tags)
/etc

Well, the fallout is here. As of this writing, the NASDAQ is down about 550 points, and they've put trading curbs on the DJIA. We all thought Microsoft's competitors would benefit from action against said company, but a quick look reveals they're all tanking too. Is this just a coincidence, or have the government's actions created repercussions that no one foresaw and nobody wants? [editor's note, by rusty] Read about the carnage at CNN.com, Yahoo, or The Washington Post, and read below for the questions at hand.


Seemingly unrelated companies like Cisco are also losing capitalization pretty heavily. I don't think anyone can credibly claim that the current fall in the stock markets would not have happened without the failure of MS settlement talks over the weekend.

We all know Microsoft has engaged in unfair, nay, illegal business practices; but it would seem we have renewed cause to resent the government's lack of care in treading on the technical sector. When all is said and done, will the DoJ lawsuit really have been worth it? What does everyone think of the ramifications of the results?

I think these questions need to be asked now that we are arguably in the middle of a stock market crash, triggered by this very lawsuit.

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Government deep-sixes the NASDAQ? | 28 comments (28 topical, editorial, 0 hidden)
Actually, the slide in tech stocks ... (4.00 / 1) (#7)
by marlowe on Tue Apr 04, 2000 at 01:50:19 PM EST

marlowe voted 1 on this story.

Actually, the slide in tech stocks started before the talks broke down. It's called a correction. It happens. At least I hope that's what it is.
-- The Americans are the Jews of the 21st century. Only we won't go as quietly to the gas chambers. --

Re: Actually, the slide in tech stocks ... (none / 0) (#8)
by rusty on Tue Apr 04, 2000 at 03:28:14 PM EST

But, the talks didn't officially break down until after it was clear that they were going nowhere. I'm pretty sure that the slide is related to the MS issue. Besides which, if this is a correction, it's one of the hardest we've seen in a while. The low was 12%, which is still within correction range, but a big correction.

What puzzles me is why people are selling things like Cisco. Is it just a matter of the avergae investor not understanding the technology, and lumping everything "internet" related together? I don't see the MS case having any bearing on the growth of the internet, or the future of infrastructure companies like Cisco.

____
Not the real rusty
[ Parent ]

Re: Actually, the slide in tech stocks ... (none / 0) (#11)
by analog on Tue Apr 04, 2000 at 04:16:27 PM EST

What puzzles me is why people are selling things like Cisco. Is it just a matter of the avergae investor not understanding the technology, and lumping everything "internet" related together?

Yep, think so. A couple of years ago I played around with one of those stock trading simulators that let you go through the process and see how you would do if you were actually buying & selling (I didn't put any money in 'cause I couldn't afford to be wrong). It didn't take me long to notice that every time some piece of bad news came out that was related to Intel, a whole bunch of other tech stocks that had nothing to do with them would tank for a few days, then recover. As an experiment I hunkered down and followed them closely and made my 'trades' accordingly for a few weeks. It was a pain in the ass, but I generated ~10% returns on a weekly basis.

I think there are a lot of people in the market that don't have a clue, and also a lot of people actually doing the type of trading I played at. Put them together, and a wild ride is inevitable.

[ Parent ]

Re: Actually, the slide in tech stocks ... (none / 0) (#12)
by rusty on Tue Apr 04, 2000 at 04:22:51 PM EST

Hmm. So in theory at least, it'd be easy to make money based solely on the cluselessness of other traders in technology. Simply watch a group of good companies who tend to get lumped in with the internet vapor-stocks, and buy when they drop a certain percentage. Cool. :-)

____
Not the real rusty
[ Parent ]
Cisco is a monopoly too (none / 0) (#16)
by Imperator on Tue Apr 04, 2000 at 06:24:40 PM EST

Investors fear that when the government finishes with Microsoft, they might turn their attention to Cisco. Cisco dominates a section of the hardware market, and it could be argued they abused their monopoly power to /* case goes here */. I'm not saying they have a good case, but I'm sure it's on the minds of at least the more knowledgeable investors.

[ Parent ]
Unintended consequences. After the ... (3.00 / 1) (#1)
by rusty on Tue Apr 04, 2000 at 01:53:08 PM EST

rusty voted 1 on this story.

Unintended consequences. After the finding of fact, when MS stock actually gained, this didn't happen. Why now?

____
Not the real rusty

Investor error 0xdeadbeef (2.00 / 1) (#15)
by Inoshiro on Tue Apr 04, 2000 at 05:01:15 PM EST

Brain not found. :-)

--
[ イノシロ ]
[ Parent ]
Re: Investor error 0xdeadbeef (3.00 / 1) (#18)
by rusty on Tue Apr 04, 2000 at 07:10:19 PM EST

But Investor Error 0xdeadbeef only happens on the BSDExchange. This happened in nasdaq! ;-)

____
Not the real rusty
[ Parent ]
Yeah, just when I think I have some... (2.00 / 1) (#5)
by stimuli on Tue Apr 04, 2000 at 02:05:55 PM EST

stimuli voted 1 on this story.

Yeah, just when I think I have some idea how finacial markets work, it goes and does something like this. *sigh*
-- Jeffrey Straszheim

I think this is an extremely shorts... (4.50 / 2) (#6)
by analog on Tue Apr 04, 2000 at 02:44:21 PM EST

analog voted 0 on this story.

I think this is an extremely shortsighted viewpoint. Any downward pressure the market feels will let up shortly; it's a volatile market by nature, and this is just one of many things that have spooked investors lately. It's also worthwhile to note that the NASDAQ was having problems keeping its levels last week as well, when everyone thought the MS/DoJ talks were going swimmingly.

To suggest that any company ought to be able to get away with the things that MS has done because it might result in short term depression of stock prices (and unless the company is already unhealthy, it will be short term) is pretty irresponsible. Chemotherapy hurts; that doesn't mean we should let cancer run its course uninhibited.

Re: I think this is an extremely shorts... (2.00 / 1) (#9)
by Emacs on Tue Apr 04, 2000 at 03:47:40 PM EST

Well put. 

If you want to feel any angst over this short term correction then aim it
squarley at MS. The Nasdaq was due to loose a little steam and this just pushed
it along.

This is a brave new world with daytraders and momemtum players in the market
big time. This simply means you will see more volatility but in the end the
quality companies will do well. In fact as I type this I am looking at a stock
ticker go accross my screen which shows my semi-conductor stock has climbed
back to +5% after being down about 13% a couple hours ago. Yee doggies..what a
wild ride.


[ Parent ]
Market fluctuations do matter (none / 0) (#20)
by kmself on Wed Apr 05, 2000 at 12:19:27 AM EST

For shorts and margin investors, market volatility matters. Even if you're right in the long term, if you find yourself forced to cover margin and can't, short-term market variability can kill you.

--
Karsten M. Self
SCO -- backgrounder on Caldera/SCO vs IBM
Support the EFF!!
There is no K5 cabal.
[ Parent ]

i'm not at all concerned, as i'm in... (2.00 / 1) (#2)
by del on Tue Apr 04, 2000 at 02:47:53 PM EST

del voted 1 on this story.

i'm not at all concerned, as i'm invested for the long term.
--
how perfectly goddamned delightful it all is, to be sure

This situation reminds me of Jenga.... (3.00 / 3) (#3)
by bobsquatch on Tue Apr 04, 2000 at 02:58:26 PM EST

bobsquatch voted 1 on this story.

This situation reminds me of Jenga. You know, that game with a tall stack of wooden blocks, where the players take turns removing a block from the bottom and stacking it on the top. All the players contribute to the essential instability of the tower, but it's only the last player to remove a block (and thereby topple the tower) that loses.

Pundits have been saying for years that the NASDAQ is increasingly supported by air and not wood.

What the hell? Do investors really ... (2.00 / 1) (#4)
by fluffy grue on Tue Apr 04, 2000 at 02:59:59 PM EST

fluffy grue voted 1 on this story.

What the hell? Do investors really think that MSFT is the very BASIS of the tech market? Are people really that stupid? Guess so. :( I'm glad I've been diversifying my portfolio lately, but this'll royally fuck up a LOT of people.

Maybe this was just a wake-up call to all the investors that there's nothing special about tech companies. Maybe it's just a temporary fluke. Maybe we need to try seeing the forest for the trees. I dunno.
--
"Is not a quine" is not a quine.
I have a master's degree in science!

[ Hug Your Trikuare ]

Re: Government deep-sixes the NASDAQ? (3.50 / 2) (#10)
by bmetzler on Tue Apr 04, 2000 at 03:50:19 PM EST

When the law has been broken, then the verdict must be guilty, no matter what adverse reactions must result. If we let companies break the law, just because it's 'good' for us, then where will they stop? Companies will keep breaking more and more laws, until there is no legal restraint anymore.

No, it's much better to suffer a little now to stop lawbreakers, then to suffer much more later because noone can be compelled to obey the law.

-Brent
www.bmetzler.org - it's not just a personal weblog, it's so much more.

Re: Government deep-sixes the NASDAQ? (4.00 / 1) (#13)
by henrik on Tue Apr 04, 2000 at 04:50:03 PM EST

If you don't have any immidiate need for the money you haven't lost anything on the stock market today. There are only two things that matter: the price you paid when you bought, and the price you get when selling. Fluctuations along the way are irrelevant. Just sit tight...

... and a lot of those tech stocks are still horribly overrated. :)

-henrik

Akademiska Intresseklubben antecknar!

Investor stupidity. (3.00 / 1) (#14)
by Inoshiro on Tue Apr 04, 2000 at 04:59:07 PM EST

Seemingly unrelated companies like Cisco are also losing capitalization pretty heavily. I don't think anyone can credibly claim that the current fall in the stock markets would not have happened without the failure of MS settlement talks over the weekend.

I think this has more to do with those F****ing morons on CNN who say things like, "this is just a reallocation of money from the new economy to the old economy" (emphasis mine).

PLEASE! This is about people who invest money and do not know anything about technology companies going, "woah, there -- Microsoft controls everything with a chip in it. If it's going down, we're all screwed!".. The "new" and "old" economies are as separate as my right and left hand. Granted, they may not be directly connected, but both serve the brain (the consumers)..

Now is the time to buy all those excellent stocks for pennies!! When all is said and done next week, these morons are going to go, "d'oh" when they realise that people are still going to need products from these tech companies, and the tech companies are still going to make money without Microsoft. Let's also remember that, like geology, stock trends are not day to day things. Things average themselves out over time. I wish I had 100,000 to buy up the AMD, IBM, Cisco, and other shares that are cheap, and will rebound nicely in a week or two. Sigh



--
[ イノシロ ]
Re: Investor stupidity. (5.00 / 1) (#17)
by rusty on Tue Apr 04, 2000 at 06:28:42 PM EST

Looks like a few other people had the same idea as you. "New economy" "old economy" my ass. This was a reallocation of money from the dumb to the smart. And what market can't benefit from that?

____
Not the real rusty
[ Parent ]
Re: Investor stupidity. (none / 0) (#21)
by fluffy grue on Wed Apr 05, 2000 at 01:33:28 AM EST

To CNN's credit, although they mention that this is on the heels of the MSFT ruling, they don't say that it's the ruling's fault. Also, earlier I was flipping channels and CNBC said that it was most likely a coincidence and that this has been brewing for the last few weeks.

Right now I just wish that I'd noticed a few days ago when AboveTrade recommended that I buy back the WLA shares I'd just sold a week before. Serves me right for not paying attention to expert systems. (Though it's stuff like this that CNBC said was partially responsible for the crash today.) Oh well... I corrected for that today even though WLA performed VERY well, and it's better late than never, right?


--
"Is not a quine" is not a quine.
I have a master's degree in science!

[ Hug Your Trikuare ]
[ Parent ]

I'm not worried about this (2.00 / 2) (#19)
by FlinkDelDinky on Tue Apr 04, 2000 at 07:12:06 PM EST

This is no big deal.  It's probably going to be a one week correction, or less.
 

I think what happenned was there was an unusually large down day.  When the
markets opened the next day the brokers called their margened (i.e. over
extended) clients and forced them to sell to cover their margin obligation.

This in turn dumped tons of stock on the market.  Which actually results in a
(possable) sale on great companies like (gasp) MS and SUN.  However the hype
stocks may be permenantly hurt.

Ah just heard on the radio that the dow closed down like 50 points and NADAQ
down 75 points.  No big deal, unless you were over extended.  I'm not even in
the market (yet)!!!!!!!!!


Horribly off-topic but stock-related... sort of (1.00 / 1) (#22)
by fluffy grue on Wed Apr 05, 2000 at 02:10:18 AM EST

I just noticed something. Look at the chart for Pfizer (PFE), makers of Viagra, for the last year. Notice anything interesting?

It's almost cyclic, ever since the introduction (and post-novelty falloff) of Viagra. In fact, the cycle looks like it's just about 56 days - two phases of the moon. That is, on one new moon it'll be at a peak, at the next it'll be at a valley, and so forth. Tonight the moon is new and it's at a peak.

Most mammals' menstrual cycles, including H. Sapiens, are tied somewhat to the phase of the moon (there's no strong scientific proof for or against this, so bear with me). Viagra is mostly for infertile couples trying to get pregnant. How does a couple know if they're pregnant? The woman doesn't have a period at the end of her menstrual cycle.

Couple decides to have a baby. Couple waits for woman's next menstrual cycle and buys a bunch of (expensive) Viagra. Man gets (expensive) stiffies for the next month. End of the menstrual cycle comes; either they're pregnant (and they can stop the $20/night sex) or they don't (and they seek alternate methods). Granluarity of the influx: 28 days.

Okay, so really it should have a wavelength of 28 days instead of 56. How's this for an idea: how many pills in a typical prescription? I'd be guessing, oh, 15 or so. Fun-loving couples have it every other night for two weeks (7.5 pills), woman "has a headache" for two weeks; total time is 28 days, and they've gone through half a bottle. Two bottles goes in 56 days.

Unfortunately, Pfizer is (most likely) merging with Warner-Lambert on May 12, so the cycle will probably be ruined (WLA actually behaves like a real stock). However, since (by my calculations) they'll be at a low point on May 2, that would be a good time to buy into PFE.
--
"Is not a quine" is not a quine.
I have a master's degree in science!

[ Hug Your Trikuare ]

Re: Horribly off-topic but stock-related... sort o (none / 0) (#23)
by rusty on Wed Apr 05, 2000 at 03:23:03 AM EST

Interesting theory. However, it requires that all (or many) your hypothetical husbands are buying Pfizer stock. Sales are not directly correlated to stock price. And, apart from all that, it doesn't look all that cyclic to me. And if it is, it looks more like a 30-day cycle.

In short, buying on the basis of this theory would be just as plausible as most of the reasons people buy internet stocks ;-)

____
Not the real rusty
[ Parent ]

Re: Horribly off-topic but stock-related... sort o (none / 0) (#26)
by fluffy grue on Wed Apr 05, 2000 at 11:36:00 AM EST

Maybe they're all buying stock then. :) I figure that stock value is based somewhat on company valuation, and bursts of sales of expensive (remember, $20/pill) medication will raise the company's valuation. Or maybe they're buying stock when they're satisfied by the sex, then sell it when they realize it can't last (the "headaches" which result).

I was mostly postulating a silly theory based on an observation. I certainly didn't expect anyone to take it seriously and actually buy stock on May 2. Not that I'd mind, though, since then my WLA stock will be more valuable when the merger goes through... :)
--
"Is not a quine" is not a quine.
I have a master's degree in science!

[ Hug Your Trikuare ]
[ Parent ]

Re: Horribly off-topic but stock-related... sort o (none / 0) (#24)
by skim123 on Wed Apr 05, 2000 at 03:23:55 AM EST

People use viagra to aid in pregnancy? I thought it was just used to help old guys and impotent men? Does it really have an effect on increasing the virility of one's sperm? Interesting...

Damn, you know a lot about Viagra... a little too much... :)

Money is in some respects like fire; it is a very excellent servant but a terrible master.
PT Barnum


[ Parent ]
Re: Horribly off-topic but stock-related... sort o (none / 0) (#25)
by fluffy grue on Wed Apr 05, 2000 at 11:32:20 AM EST

Well, as a pregnancy aid, it's assuming that the man isn't sterile, just flaccid. Okay, usually it's a sexual aid, in which case the second idea (two weeks fucking, two weeks of "headaches") is more likely.

It was just a silly theory based on a silly observation. :)
--
"Is not a quine" is not a quine.
I have a master's degree in science!

[ Hug Your Trikuare ]
[ Parent ]

Re: Horribly off-topic but stock-related... sort o (none / 0) (#28)
by skim123 on Tue Apr 18, 2000 at 11:13:54 PM EST

Well, as a pregnancy aid, it's assuming that the man isn't sterile, just flaccid

Hehe, when I hear "pregnancy problems" I usually think of sterility. I guess flaccidity doesn't penetrade a 21 year old's mind too often... hehe...

Money is in some respects like fire; it is a very excellent servant but a terrible master.
PT Barnum


[ Parent ]
Re: Microsoft deep-sixes the NASDAQ? (none / 0) (#27)
by Anonymous Hero on Thu Apr 06, 2000 at 12:12:42 PM EST

I am no broker, so I may be completely wrong. Just some silly idea: The government is going to fine Microsoft. Microsoft is saying that this will damage economy. People laugh. Then the judge says that Microsoft broke the law. Microsoft stocks falls. Microsoft has lots of money. Microsoft may have stock values. Assuming, Microsoft sells a lot? => NASDAQ stock falls. People frightened. Republicans say then won't fine Microsoft so hard for breaking the law a little bit. People vote safety. Republicans win elections. Just a little nasty idea. Excuse that's silly. no! No! NO! Excuse! Please!

Government deep-sixes the NASDAQ? | 28 comments (28 topical, 0 editorial, 0 hidden)
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