*** The thrill is gone from this market...
*** Dollar hits new highs, gold doesn't budge
*** No Boo-Hoo in Soho
*** The thrill is gone. The Dow rose 7 points yesterday.
The Nasdaq fell 106 points.
*** Investors seemed to be abandoning the big cap tech
stocks -- against which I warned you weeks ago - in favor
of utilities and financials.
*** Cisco was hot a few weeks ago. Investors were happy
to buy it at $81. Now you can pick up a share for $56.
Microsoft, too, has been discounted -- from $119 a few
months ago to $66 yesterday. And AOL traded hands at $95
earlier this year. It is now at $55.
*** The market hasn't crashed. But it has changed. Fear
hasn't moved in and taken over. But it has visited once
or twice. Investors are more cautious than they were in
March. That caution could, of course, disappear in a
summer rally. We'll have to wait and see.
*** The "WSJ" reports that there are 380 IPOs waiting for
an opportunity to go public. But times have changed. IPOs
are no longer guaranteed to go up. Investors have gotten
much more selective.
*** Another "WSJ" report says that lenders are giving
away PCs to encourage borrowers. Could it be that even
consumers are getting just a teensy bit worried too? Now
they have to be bribed to go further into debt. These
free PCs must be among the most expensive pieces of junk
a family can acquire. In the "WSJ" example, a sub-prime
borrower will make payments on a $40,000 mortgage until
2015 -- at which time, she will have paid $79,560 and
still owe a lump sum of $34,971.
*** Oil rose about a dollar -- to $30.33. Gold did
nothing. And the dollar rose to a six-year high against
the British pound, a 15-year high against the New Zealand
currency...and an all-time high against the South African
*** Nearly all of Africa seems to be drifting into the
heart of darkness. "The Economist" calls it "The Hopeless
Continent" on the cover of this week's issue. A photo in
today's "Times" of London shows an infant whose hand was
cut off by rebels in Sierra Leone. And investment guru
Jim Rogers, who is famously traveling in Africa with his
companion, sent an email yesterday saying he was "scared
to death." Guns, murder...hey, it's just like home.
You can follow Jim's journey into the heart of Africa on
his website http://www.jimrogers.com.
*** Have you seen RJ Reynolds lately? It's trading at 1
times earnings and yielding 12.5%. It has $1.756 billion
(unaudited) in cash. And the lowest price per share --
$24 -- in the Dow 30.
*** Reuters reports that companies are going into default
faster than they did a decade ago when the junk bond
market collapsed. David Wyss, chief economist at Standard
& Poor's: "If this is happening at the peak of an
economic boom, what happens in the next recession?"
*** I've run across a chart that shows in dramatic
fashion how similar the rise in the Dow from 1920-29 is
to the current bubble. Please take a look. http://www.dailyreckoning.com (click "History May Not
*** In Fiji political power is changing hands in the old-
fashioned way...that is, by force rather than fraud. A
group of armed men stormed the parliament building on
Friday. Yesterday, a Mr. George Speight announced that
"the executive control of our country currently resides
in my hands."
*** A new love bug is circulating. It is said to be more
dangerous than its predecessor -- changing the attached
file name as it goes and doing more damage once a
computer is infected.
*** In what was described by a Labour politician as "the
biggest breakthrough in British race relations in a
quarter century," a new directive from the European Union
will shift the burden of proof when employers are charged
with racism. Firms will have to prove that they are not
*** Our office here in London is on the edge of London's
fashionable Soho area -- also the home of Boo.com --
which went belly up yesterday. But there is no need to
look up as you wander Soho's streets. The crew that
wrecked one of Europe's most promising Internet startups
is not jumping out of the windows. In fact, the job
market for people with Internet skills is so hot that
even losing $130 million or so for your former company is
no bar to employment. "I'm going to take the next two
days off and start an new job on Monday," said one
employee quoted in the "Daily Telegraph."
*** Also of interest in London, Damien Hirst, described,
perhaps tongue in cheek, as an "artist," took his son's
educational toy, designed to illustrate the human
anatomy, and copied it as a 20 foot bronze sculpture. Art
critics (if that is the right word for a person who heaps
sycophantic adulation on works of pure imbecilic,
retrograde ordinariness) described it as "a masterpiece"
and "the first key work of British art for the 21st
century." Aesthetically-challenged collector Charles
Saatchi failed to see the humor in the piece and bought
it for $1.5 million. But the creator of the toy, which
the "Guardian" says "bears a remarkable resemblance to
the sculpture," sued. The parties settled...
*** Today is Ho Chi Minh's birthday. Ho learned his
politics in Paris, where he worked as a waiter.
+ + + + + +
With stomach churning volatility, is now the time to buy
and hold tech stocks? In less than four weeks Intel stock
went up a healthy 31%. In just the next two weeks, it
lost nearly 10%. But with the power of leverage in a
speculative market, you could have bought January $90
call options on Intel for an astounding 628% profit.
Higher profits faster with less volatility. For more
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Technology produces its own share of wrong turns and dead
ends...not to mention ironies and contradictions.
Gene mapping and other very new technologies have no
immediate or even visible profit potential. But the very
uncertainty of their prospects helps to expand the
Yet, at the beginning of this century, the very newest
technology also had potential -- an explosive potential
in fact, as least as great as that of the human genome
project or the Internet.
In 1895, the electron was discovered. And exactly 100
years ago, Max Planck found that the rules of classical
physics were inadequate to explain what the study of the
atom revealed. He described the "smallest common coin in
the currency" of physics as a "quantum."
Five years later, Einstein saw that light followed the
principles of quantum physics...and Niels Bohr, in 1913,
realized that quantum theory also applied to matter
Then in the mid-`20s, a uniquely talented group of
physicists came together in Copenhagen, under the
guidance of Bohr, to develop the Copenhagen
Interpretation of quantum mechanics.
Today I am interrupting my story of the Battle of
Britain. Elizabeth came to London yesterday. My partners
and I would have been content to go out to dinner,
discuss business and drink. But Elizabeth's arrival
changed the direction of our evening. Instead of enjoying
ourselves, we would have to be improved by some cultural
experience. So, with dreary hearts we passed the bars,
spilling over with happy drinkers, and a movie theater
with "Gladiator" emblazoned on the marquis in letters
two-stories high, and arrived at the Duchess Theatre in
Entering the theatre, we saw a small, empty stage.
"Danish modern," said my partner, a comment on both the
barrenness of the stage set and our expectations for the
evening's entertainment. But the play, Michael Frayn's
"Copenhagen," was anything but barren. Instead, it was a
rich and elegant look at one of the most remarkable
episodes in the history of science, ideas and war.
I will not review the play for you. I merely wish to tell
you some of what it was about. The specific dramatic
event chosen by Frayn was the meeting in Copenhagen
between Bohr and Werner Heisenberg in 1941, about a year
after the Battle of Britain was over. Europe was at war.
Denmark was an occupied country. Heisenberg was in charge
of the German atomic energy program.
In 1900 the secrets of the atom had at least as much
potential as the secrets of the genome today. Though many
advances emerged from atomic research, it produced just
two very dramatic products. The first was dropped on
Hiroshima in August 1945. The second was dropped on the
investment world about 30 years ago -- nuclear power.
Both bombed. The first was destructive to human life. The
second was destructive to money. As mentioned here a few
days ago, nuclear power plants now change hands for less
than half of 1% of the original cost of construction.
But of course, the future could not be foretold in 1928,
anymore than it can be today. Besides, Heisenberg had
just made a fascinating discovery: that one could not
know the present, either. Heisenberg showed that the more
accurately you knew the position of a particle, the less
accurately you could tell its velocity. That insight
became known as the Heisenberg Uncertainty Principle.
Uncertainty (I do not shrink from stating the obvious
when it is called for), prevails in the rest of life,
too. The observer and the observed are inseparable.
Investors, for example, may think they are objectively
viewing the stock market and making decisions based upon
what they see. They do not realize that what they see is
of their own making: they look at the market and see the
reflection of their own emotions and aspirations. Their
greed, or fear, or indifference produces the market
action they see.
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Last modified: April 02, 2001
Published By Tulips and Bears