Voices
Views on Tuesday’s market turbulence from investment pros and individuals:
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“This reminds people that retail investor moods can change very quickly. It will make people more valuation-sensitive. If the Nasdaq goes down to 3,500 and stays there for the next two months, it will be harder to get really big valuations for later-stage companies. Right now, if you’re a business-to-consumer retail product company, you’re at ground zero.”
--George Zachary, general partner at Mohr, Davidow Ventures
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“The Nasdaq rose so fast so quickly, and the investment banks took so many companies [public] that didn’t have good business models. At some point it had to snap back, and, unfortunately, when it does, it snaps back violently. Now there’s a great pruning of companies that’s putting things back into reality.”
--Christos Cotsakos, chairman of E-Trade Group, an online brokerage
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“I think (hope) a shakeout like this will cause more investors to think twice before getting into panic-sell mode. Today may have actually done more to stabilize the coming weeks than anything else. ... This reminds me of Red Adair’s strategy for putting out an oil-well fire--blow it up.”
--”Rat n a cage,” posting on a Yahoo message board
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“Having cash on hand to take advantage of the market when it goes on sale is ‘foolish’ behavior everyone should practice.” --”Ionagoal,” Motley Fool message board
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“You ran into a little old-fashioned panic. We came back because it subsided; people realized it was just that, and not something fundamental to the economy that was causing it.”
--Marshall Front, managing director of Front Barnett Associates
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“I think the bottom may be in place. That’s not to say that we won’t go back down and test these levels.”
--Brian G. Belski, chief investment strategist at George K. Baum & Co.
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“As hard as it is to believe, this is a good thing. One sector of the market was insanely overvalued. The rest was deeply undervalued. Now we are reversing that.”
--Pete Anderson, chief investment officer at American Express Financial Advisors
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“Today’s pressures came from three Ms: Microsoft, margin calls and mounting anxiety.”
--Alan Ackerman, senior vice president at Fahnestock & Co.
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“People are now beginning to realize many of these stocks were overvalued. They’re beginning to look at the numbers very, very closely, and what they see they don’t like. There is another factor here and that’s the leveraging that is inherent in such a market. The prices move quickly on the upside, but they move just as quickly on the downside.”
--Mark Mobius, managing director of Templeton Asset Management
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“We needed to see some equity weakness to change people’s perceptions of what had been pretty staggering equity returns.”
--Jerry Paul, bond manager at Invesco Funds
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“The momentum fed on itself on the way up. You’re seeing the same thing in reverse here. People are looking at the valuations and saying, ‘Uh-uh.’ ”
--Ted Bridges, money manager at Bridges Investment Counsel
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“This reminds people that retail investor moods can change very quickly. It will make people more valuation-sensitive. If the Nasdaq goes down to 3,500 and stays there for the next two months, it will be harder to get really big valuations for later-stage companies. Right now, if you’re a business-to-consumer retail product company, you’re at ground zero.”
--George Zachary, general partner at Mohr, Davidow Ventures
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“We’ve been through this kind of thing before. The market here is groping for a bottom. It’s a time of taking stocks out of weak hands and putting them in strong hands. Days like today show that there’s real liquidity on this floor.”
--Peter Mancuso, specialist for Buttonwood Specialists
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“We needed to see some equity weakness to change people’s perceptions of what had been pretty staggering equity returns.”
--Jerry Paul, bond manager at Invesco Funds
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“The markets were ahead of themselves. But the economy is no different today from where it was 90 days ago or 180 days ago. In all the years I’ve been in the business [since 1967], the U.S. economy and the world economy are the best they’ve ever been.”
--Richard Strong, chairman of Strong Capital Management
