As I've said, some first tier fliers may top out and correct a bit this week but the next wave of the recovery rally takes place in 3rd tier dogs (my pix SCNT, LOR and NOVL plus more if I can get them cheaper this week) and telcos.
NY Times Business section big article on why big telcos (I mean VZ, SBC, WCOM, FON etc.) are at their lows and undervalued, how their future dominance is not priced-in and neither is their infrastructure investments. Not going to double your money but they'll out-perform going forward.
I'd look for modest dips in SUNW, NT, INTC etc. but for 2nd tier dogs like LU to continue up a bit more form here. I'd also watch for bargain hunting on any dip, like when/if the above three drop 10-15%. An example is ERICY last week there was a bottom buy point on bad news then a sharp bounce which could have gotten you 30% in one day on the upside. So buy into too much fear and sell into to much greed. You can make money both ways but shorting is the riskiest because shorts have been neutralized (or neutered, or neutron-bombed) to a degree the past two weeks and are still nursing near fatal wounds. Still there will, be some shorting activity in selective issues.
I'd buy into any earnings fears as they're still well priced-in for most stocks and that money is more or less backward-looking. No one expects anything but bad numbers. In some cases they could be surprised.
For instance we know WCOM is under pressure because they announce next week but that's the biggest best-buy target because it is over-due for a rally to $25 and eventually above. It's internet backbone business is not even priced into the stock at these prices. It's free and long-term it's mega-valuable.
SBC, BLS, FON also at bottoms IMHO. WCOM and FON will both be at least partially bought out and VZ and SBC will emerge the kings of the toll road with PE's in the mid 20's again.
VZ's big upcoming wireless IPO gives it the most to gain this year. Expect that this fall and to be announced in the next several months. WCOM and FON both doing tracking stocks and trying to unlock value. T and Q I'd avoid because the above are better bargains. |
