Fire In The Naz

November 14, 2000
Daniel Beighley

As election battles raged on in Florida courtrooms Tuesday, stocks shrugged
off their recent worries and launched into a tech-driven rally that took the
Nasdaq up 5.8% for the day. The rally broadened out to include retailers, drugs,
and even cyclicals, which left the S&P 500 up 2.2% and the Dow up 1.6%.

Good earnings news from retailers and positive comments from Goldman Sachs
guru Abbey Joseph Cohen also helped stoke the market fire.

Nasdaq volume, however, dropped about 10% from Monday’s levels, as 1.77
billion shares changed hands, and NYSE volume matched Monday, with 1.11 billion
shares trading.

“I think that as early as yesterday afternoon we came to the realization
of several things. One of them is that we will have a President at some point in
time. Regardless of who it is, I think the markets have decided to move on
because I think it’s a foregone conclusion that, (a) there will be a President,
and (b) he’s not going to be that impactive to Wall Street,” said Art Hogen,
Chief Market Analyst, Jefferies & Co.

“With such a razor-thin majority in Congress, very few large policy
items are really going to be put into place in the first year of the next
administration. So, we got what we wanted. We’ve been acting like we didn’t
because of the uncertainty, and we’re starting to come to that
realization,” he added.

According to preliminary numbers, the Nasdaq soared 171.52 to 3138.24, the
Dow added 163.81 to 10,681.06, and the S&P 500 gained 31.69 to 1382.95.

Since most sectors were positive, that left few losers, although there was a
little pressure on the banks
(
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PowerRating), which edged down 0.3%.

Looking ahead, the Federal Reserve meets Wednesday and an interest rate
announcement is expected at 2:15 PM ET. While most analysts see the Fed leaving
rates unchanged, some have suggested that a move in the inflation bias might be
in order given the recent market turmoil and signs of a slowing economy.

Buffett’s Back!

Remember back when the New Economy was supposed to replace the Old Economy and
everything Net, optic, broadband, or wireless soared double digits every day?
Remember when the old sages like Warren Buffett were ridiculed for their
old-fashioned, non-tech ways? Remember when page-views, eyeballs, and click-throughs
were king and profits were ignored?

Well, every dog eventually does have his day, and today amid the ruins of
Nets, chips, and battered telecom and tech, the Oracle of Omaha’s Berkshire
Hathaway moved to a new 52-week high, with a gain of 800 to 66,200.

Ironically, Berkshire hit a multi-year low of 40,800 on March 10, the same day
the Nasdaq peaked intraday at 5132.52. Well, eight months later, Buffett has
had the last laugh. Berkshire has increased 62% since March 10 while the New
Economy Nasdaq has fallen 44%. On a year-to-date basis, Buffett wins as well,
as Berkshire has posted an 18% year-to-date return while the formerly
high-flying Nasdaq has booked a 24% decline.

Fire In The Naz

BUY THE FEAR, SELL THE GREED

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