Bill & All,
Yesterday 'felt' very much like a top. I don't think we're going higher.
After giving Bill's June 20th prediction 2 weeks, I went completely long in
tech stocks and made enough to think about retiring. I think the prediction
would have been good and the coming correction less severe had we not had
the Yen/Dollar concern coupled with complete lack of inflation leading to
no possibility of a rate hike. That and great numbers coming out that week
won over fundamentals.
I'm probably wrong, but it doesn't feel that like I am. The day before yesterday,
I bought MANY calls on MSFT, sold them for a triple yesterday and used the
profit to buy puts for hedging my employee options. Today, I chickened out and
sold some of my puts (not all :-). I had the same feeling about MSFT selling
off as I have about the market.
This April, MSFT led the tech sector and contributed to bringing the market out of
the doldrums. Now the CFO said flat out that they didn't buy stock this Q
because the "price is too high".
Someone I know who understands the stock market less than I, which is
a feat, I assure you, told me that I shouldn't sell my MSFT. She was sure that it
was going to go up so high after earnings that it would split. She enthusiatically
described it as if the stock would split at the seams and pop into two shares
spontaneously due to the pressure of its value.
I really should have taken that cue and kept all my puts, but I didn't.
One question. If money flows from 401K plans will keep this market going
forever, what happened in April? Were new 401Ks just offered at a huge number
of companies since then? Why couldn't they keep it raging then?
Humphrey Hawkins testimony on Tuesday.
Good luck everyone,
Mike |
