Broad market indexes for Britain, Germany and Spain are also down. And if you measure the value of these indexes in dollars, the Europeans have gotten clobbered this year as hard as the Asians. As investors survey the globe, they see many reasons for caution. What a difference a few months make. The news from the Mideast alone is enough to make a wary investor reflect on the good sense of owning 30-year Treasuries.
Investors shorten the time horizon over which they're willing to project future profitability.
The companies are making the same products and even making the same profits. During the bubble-headed optimism of the late 1990s, investors bought every technology in sight, and they seemed to have an almost infinite time horizon. In this atmosphere, companies achieved multibillion-dollar market capitalizations simply on the basis of an intriguing idea. Anything that sounded good was good. I think there is a form of inflation rampant in the high-tech community.