The shake-out in high technology stocks has led to much more realistic valuations, and anything with internet or Web on its resume doesn’t now automatically shoot to a premium of a thousand times next year’s sales, so the time bomb ticking under Wall Street has been defused, and the market is safe again, right? Well as the Dow looks down from the dizzy heights of 5,889 and change and the weight of money merchants happily say that with all that cash still flowing into mutual funds, nothing can go wrong, we are uneasily reminded of the late 1980s when the Tokyo market, as it headed for 38,000, looked as if it was held up by sky hooks, and had to crack sometime. Since then, it has been right down to 14,000, and has seldom been much above 20,000 since. And according to Barrons, at their peak in 1989 Japanese mutual fund managers had portfolios worth $250bn under management. Since then, redemptions have been so high and so relentless that that pot is down to $22bn.
