I very much doubt that we'll be seeing Nasdaq 4000 anytime soon but your point is well taken. People have short memories and the only thing we learn from history is that we don't learn anything from history. The tech bubble has burst and with hindsight it is obvious how stupid and greedy investors were but this too will one day be forgotten amidst the next hot sector and bull run. The bulls will argue once again that the old rules no longer apply... that things are really different this time and the good times will never end.


I don't pretend to know what the market will do and equities are not at all my specialty. But the market is very rarely a rational, efficient mechanism(espeically equity markets!). It is a duel between bulls and bears, a war between greed and fear. So returning to your point, you may very possibly be correct. I would say that the market has fully priced in the recovery. But who's to say the market is or will remain rational? Right now there is still the element of fear, of another enron, more accounting disasters, a strike on Iraq, an agressive fed, a weak rebound in earnings, etc. However, the economy is definitely on the upturn and it may soon be that greed gets the upper hand on fear.


That being said, i would still bet against a substantial rally in equities in the near term and certainly against Nasdaq 4000. After being burned by the tech bubble, people are going to be more careful, at least for a little while longer.