In the innovation of new products and technologies there is the natural process of creative destruction, as Alan Greenspan reminds us. Briefly, this means that rapid growth in new sectors inevitably leads to over investment and excessive competition, and in turn mergers and bankruptcies. Eventually this leads to more heavily capitalized and secure firms operating in a less competitive environment. If it is any comfort, the fallout in the technology sector is a reflection of this growth process. This natural selection process benefits those firms who are organized and managed well and that provide investors with sound earnings opportunities.

It is quite apparent, despite Friday's good humor, that there will be no year end rally. The year 2000 saw an irrational run up in prices that was not backed by value - sooner or later investors want real value. Investors found out that new economy stocks were not immune to cyclical phenomena or to the laws of developmental economics. Firms failed because basic good business practices weren't followed. Irrational euphoria led the way.

Consumers have been on a tear for several years and it is only natural that sooner or later they would need to catch their breath. What seemed like an infinite buying spree has ended with higher gasoline and heating oil prices, higher debt levels and lower equity prices. Is it possible that people just decided they really had enough stuff?

See you January 7, 2001. Meanwhile we wish you all very happy, healthy and prosperous holidays and New Year!

Introduction   •   Global Stock Market Indexes   •   Recap of Global Markets   •   Currencies   •  Indicator Scoreboard

The Bottom Line   •   Looking Ahead