Well said Les.....
On the subject of the internet stocks, I do see a major correction in the making, yes seek could rally on a good earnings report, but I believe these stocks have gotten ahead of themselves, hence my short position.
Unfortunately I am also very bearish on the market and not a believer in the "new paradigm" theory. Companies whose earnings have grown at 10 or 15% per year in the last three years have gone up 100 to 300%. That simply is not sustainable. This market is in the hands of impulsive speculators and that is not something I would risk my retirement on. I have sold all my long term positions in the last several weeks (albeit painfully) and have only puts and shorts left.
With companies like Seek YHOO and the likes, when they get so far ahead of their fundamentals, regardless of the future prospects, they tend to come swiftly back to reality. And then they will only trade on their fundamentals going forward. The fundamentals don't warrant these prices yet.
The recent run ups of the third tier penny stocks is almost always a sign of a top. And actually the massive speculation going on in this market may very well be signaling a market top.
There are many signs that are showing themselves, low mutual fund cash, advance decline line is weakening, stocks above their 50 day moving average declining, etc. It tells me we are in for another 1000 point correct at the least (and possibly as much as 4000 points).
I hope you all take a close look at your portfolios and at least have a game plan in place if things start to get tippy. No one ever lost money taking a profit. It may be a time to take a little money off the table.
I wish you all continued success... |
