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Why Leadership Changes Take Place21 June 2000NEW YORK -- June 21, 2000 – As reported by CBS MarketWatch: "In April, during the Nasdaq's big correction, I put forth the theory that market leadership would change after this large stock market correction was over. Recent history was not on my side. "…There are many reasons why leadership changes take place. Often, investors discover that the fundamentals that have driven the particular group sharply higher, are not as good as expected. Other times, investors have simply become over-weighted in an area and feel they must diversify their risk. "…These groups have probably been driven higher by two factors: a decline in interest rates and an increase in merger activity. Casino stocks are up 33 percent during the period, driven by strong results in Las Vegas and the MGM Grand (MGG: news, msgs) purchase of Mirage (MIR: news, msgs). The only member of the top ten that had done well in the last year is the secondary oil sector. Not one technology-related area is among the top ten. "…I believe that some of the leadership changes that have taken place over the last few months will hold. This does not mean that all technology will fall like a stone, but investors will have to go elsewhere to find the strongest stocks. "…Investors should also expect better performance from growth areas that are not dependent on the economy like the health care sector." |