The idea is that interest rates will affect the old-economy companies more, because they are more interest rate sensitive. You will probably have less of an effect on technology stocks, and there is a lot of bargain-hunting going on. I think investors are a little more comfortable coming into these blue chips down 30 percent.
Quotes about old-economy (4 Quotes)
We still have a flood of money coming into technology at the expense of these old-economy stocks. If you look at the sectors that make up the Nasdaq they are sectors that are the hottest in our economy.
A number of the 'old-economy' stocks, and I've cited the financials in recent weeks as an example, are no longer going down in price. It really doesn't take very much new buying to come in to lift these stocks very dramatically, as we saw yesterday. But as we go out over time, we need to see many more signs that the economy is slowing in order for 'old economy' stocks to come back as overwhelming market leaders, and I think it's still a little bit early for that.
I think the performance gap between the new-economy and old-economy stocks is like a rubber band it seems to be snapping the other way. The new economy sounds very exciting, but you're still going to need food, medicine and electricity to survive.