Steve Zito, MS Fin/BS Econ Wharton School, HTML Writers Guild
uses economic and technical analysis to forecast the direction of the stock market. The views in this newsletter are opinions only, and should not be solely relied on for your investment decisions.
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NASDAQ COMPOSITE
INDEX closed 1282.65

July 23, 2002 - Tech Stocks Will Outperform Dow

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July 23 Go To Page 2 Nasdaq Composite closed at 1282.65 on July 22. Nasdaq has fallen 99.97 (7.2%) since my July 15 page. CNBC touted Lehman Brothers Strategist Jeff Applegate Monday and asked why the influential brokerage hot-shot changed a target price on the Dow from 12,000 to a new 10,250 mark. He replied, "It's obvious." I earned 2 Master degrees (in Finance, Accounting). It is not obvious to me. My short-term target for the Dow is 6400, the level when Alan Greenspan called investors "irrationally exuberant" in 1996. Without help from a vacant Treasury Sec. Paul O'Neill who went to Uzbekistan last week and unseasoned funding requirements by wooden Indian Tom Ridge for his domestic police state, the Bush administration has produced the first Presidential War sequel since Teddy and Franklin Roosevelt. What Bush Sr. failed to do in 1991 was help the U.S. economy, as he was out of touch with people. George Jr. has followed in his father's footsteps, and that is the message of the markets. Foreign investment is fleeing U.S. stock and bond markets causing U.S. dollar to crumble. Americans have viewed their life savings disappear only to have the same brokerages bombard them with TV ads pushing the myth their stocks always rebound. In fact, the Japanese stock market has gone down for 14 years since the Tokyo bubble burst. A man in the street interview on Nightline Monday had a fellow stating there has never been a ten-year period in which stocks declined. Not true U.S. stocks fell from 1973 to 1982, the high on the Dow just over 1000, the low 772 was August 1982, when Reagan was building up his Defense Budget with U.S. unemployment at 12%. Sound familiar? Every major period of stock market advance has been presided over by Democrats. The last five recessions were in Republican administrations. Stocks also fell from 1929 to 1938, and only full 100% production in World War II restored the economy. As I said on July 2, technical analysis will not work this month. INDEX FUNDS are dumping shares, even oil stocks. CNBC asked the question all day, "Why is EXXON-Mobil falling?" Guess no one heard California passed law for immediate reduction in carbon monoxide emissions from automobiles. The response by GM and FORD Monday night was to raise car prices on all 2003 models. Meanwhile, factories in China continue to flood the atmosphere with toxic pollution. The Chinese don't have any pollution controls at all. Doesn't stop Merrill Lynch and Morgan Stanley from running their ads telling us to invest your money in a polluted China. NYSE CEO Dick Grasso made the TV rounds on Sunday urging the U.S. public to invest in America, while his brokerage CEO buddies are moving their money to China. Meanwhile, retirees have lost 80% of their life savings from watching CNBC's Maria Bartiromo touting stocks as Nasdaq hit 5000. Last week, Bartiromo giggled when she reported CSFB lowered their Worldcom target price to "zero." What a JERK.
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