> Friday December 24
>
> By DUNSTAN PRIAL AP Business Writer
>
> NEW YORK (AP) - Investors have indulged in an unprecedented shopping
> spree this holiday season, pushing stock
> markets to record levels both at home and abroad.
>
> The Nasdaq composite index briefly crossed 4,000 for the first time on
> Thursday, less than two months after passing the 3,000 mark, and closed
> at a record high for the 58th time this year. Meanwhile, the Dow Jones
> industrial average leaped for its first record close since August.
> Records also were toppled by major market indicators in London, Paris
> and Frankfurt, Germany.
>
> The buying continued today. Hong Kong's major index closed at its first
> record high since Aug. 7, 1997, before the Asian financial crisis began
> to take its toll on the territory, and London's stock index reached a
> new high in a half-day Christmas Eve session.
>
> A driving force in the stock market surge is a fear among investors of
> being left out of an Internet-based economic revolution.
>
> And mingled with that fear - especially in recent months - is a growing
> belief that the once vague potential of the Internet is beginning to
> solidify into tangible proof that the online revolution is fundamentally
> changing society.
>
> These factors have created near hysteria among investors and sent the
> world's stock markets surging upward at an unprecedented rate.
>
> Jim Melcher, president of Balestra Capital Management, a New York
> investment firm, was blunt in his assessment of the current environment.
>
> ``It's more than euphoria, we're in an absolute manic phase,'' he said.
> ``It's more extreme than anything except maybe the speculation of 1928
> and 1929.''
>
> Melcher suggested that the phenomenal gains seen by many individual
> stocks and all the major indexes are essentially the manifestation of a
> sort of mob mentality.
>
> Money managers who run large pension and mutual funds feel compelled to
> jump on the bandwagon of a given stock or sector, he said, because their
> jobs depend on short-term performance evaluations. And since most
> investors have grown accustomed to huge annual gains, fund managers have
> no choice but to chase whatever stocks are shooting higher, Melcher
> said.
>
> ``Fund managers are in a performance derby, so whatever's working they
> all pile into it,'' he observed. ``People are going to get what they
> deserve. They're going for maximum performance without concern to
> risk.''
>
> Merry Christmas.