Heard on The Street

SAN FRANCISCO (04/18/2000) - "Insane" and "crazy" were the two words most commonly used to describe the market by a group of bankers chain-smoking outside the New York Stock Exchange yesterday morning. None of them gave their name. "You know what we were doing Friday afternoon?" asked one, referring to the day of the big drop.

"We were standing around on the floor taking bets on whose badge number the Dow was going to bottom out at. That's what the professionals were doing Friday at 3:30." It's fortunate that the speaker's badge didn't win - it's No. 1086.

"It's gonna go down today, I tell you that," said one man with a calm shake of his head and shrug of the shoulders. But not one of the guys was panicked or even saw much to fear in the near future.

Although investor panic might have influenced the drop, these particular bankers saw it as healthy - an event that could happen a few more times without causing lasting damage to the market. "The only thing people should worry about [along the lines of] 1929 is margin calls," another man said. "That's when your bills come in and you can't pay. That's the only thing to worry about. That's what happened in 1929." He said, however, that comparing this crash to that of 1987 would be like comparing apples to oranges. "There was no Internet then," he said. "The Nasdaq was infantile." There was no Internet in 1929 either, but the shift in the size of the Nasdaq has posed a more serious threat.

The tech exchange lacks the level of regulation that the NYSE has, which adds to its volatility. "It's a crook market," the man said. "It's like the Wild West in there." And the smokers think this free-for-all mentality could have an upside. With everyone forecasting a bear market, the bankers think that some investors will be motivated to step in and buy. One man attributed the recent drops to profit-taking by investors unsure of the future of high-flying technology.

"Companies lose $50 million in one quarter, then they lose $100 million in the next quarter," said one worker. "Investors just want to take their profits and get out." The men's general sense was that, at worst, this would be a prolonged correction, followed by another upward trend, albeit at a slower pace. "If you're in it for the long term, you'll be fine," said one banker. His cronies agreed. The implication was that if you're in it for the short term - well, perhaps you shouldn't be. "Even the daytraders, if they have half a brain, they won't panic and sell," the banker continued. "They'll sit it out."

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