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Strategies & Market Trends : Tech Stock Options
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To: Tom Trader who wrote (30163)12/3/1997 10:55:00 PM
From: Suresh   of 58727
 
Tom,


But there are some positive divergences appearing even on the SOX and I think that the next sell-off should be the time to start accumulating the quality names.

identifying the quality name is very crucial. I remember everyone was/is still looking at DD sector as a sector selling at cheap multiple based on future earnings projection. But looking at the current estimates for disk drive sector, the current price looks expensive. (Recent 98FY estimate for WDC is 30 cents! It used to be as high as $3.40 not too long ago).

Some do's and dont's of investing/trading I am considering (any comments welcome!);

1) Buy semi/semi equip (leaders) BTB ratio is < 0.9, sell them when BTB exceeds 1.05 and starts falling. Worst one could do is just have some dead money sitting without doing much. (Reason... general perception that either trees shrink to -ve length or grow out to infinity)

2) Buy DD sector when they are bleeding red ink. (Splits make some of these stocks look cheap... )

3) Follow Steven Check's (market timer) advise on blue chip companies with long track record. Buy when PE ratio falls to less than 15 and sell them when it reaches ratio's > 22.

4) For aggressive portion of the portfolio; if one can spot emerging technology buy them when they are growing and bail out when field becomes crowded or the reason for the selection of the company no longer meets the criteria (Eg; ASND, CSCC, USRX etc.)

5) When we reach a 10 year low in the averages (if that ever happens), buy BRK.A assuming Warren Buffet is still at the helm at BRK and forget about the market.

6) Market for a product doesn't expand to infinity.

Regards,

Suresh
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