PSFT - Fiscal 1998 - Discussion for the next year Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year

PSFT 0.0001000

0.0%

Oct 29 5:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Melissa McAuliffe who wrote (1685)	7/29/1998 2:21:00 PM
From: Just_Observing	of 4509

Drop in Software Sector We have CA to thank for this correction, IMHO. They have lost about 17 billion in market cap since announcing earnings last week. Imagine that you are a mutual fund manager, say, Fidelity Software. Your mutual fund NAV is down sharply and investors start bailing out. You are forced to sell across the board. Moreover, to minimize tax consequences, you want to have profits to match the horrific losses in CA . So you sell some of the stock where you have had your best gains so that you net out with a neutral tax result. So you will sell SEBL, PSFT, NETA, ITWO, MANU, etc. You are forced to sell the best of your holdings since they have the largest profits. The short sellers meantime have a field day with the sector knowing that the contagion will spread. And the 'TA followers' see this as the confirmation that TA works and sell out. With the lowering of the costs of trading, the incentive to buy and hold has been reduced dramatically further increasing the volatility. We are moving to the era of frictionless trading where the commissions are minuscule compared to the cost of holding in a downturn. The price swings will get much worse. The only stocks in the software sector immune to this are those that trade in foreign markets where the CA debacle did not strike. So BAANF and SAPHY have been relatively immune. Also, much larger caps such as MSFT are seen as a safe haven when others are collapsing. Every debacle increases the "apparent value" of these mega-stocks as they are perceived as being immune to such phenomena. This is just my opinion. What do you think?

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next