Nasdaq inspires perverse mood

One of the most intriguing elements of the market's recent decline, especially the slump in the value of technology stocks and the US Nasdaq index which relies so heavily upon them, is the malevolent thrill it seems to be giving some market analysts.

The object of their scorn seems to be those investors attracted to the markets for the first time during the current long-running bull market, to say nothing of the day traders whose antics and requirement for short-term profits have done so much to increase market volatility.

In particular, the derision seems to stem from the fact that these recent converts to equities appear to have abandoned the more traditional benchmarks of value in the market, such as price/earning (P/E) ratios, sending stock prices soaring to previously unimagined levels.

One US analyst this week referred to heavy investors in technology stocks betting on what he called the P/F ratio rather than the P/E ratio. The P/F ratio? Price to fantasy, of course.