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Politics : High Tolerance Plasticity
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To: cnyndwllr who wrote (6)2/19/2001 5:09:22 PM
From: jim_p   of 23153
 
ED,

Welcome.

The primary reason for my guesstimate is:

1. The amount of cash on the sidelines.

2. The number of investors who miss out on the last tech run who are anxious not to miss the next one.

3. Sentiment for investing in tech is now growing very negative.

4. The worse performing sector in one year, tends to outperform the market the following year.

5. Interest rates are going a lot lower. The fed does not want a market collapse to lead to an economic collapse, and will take the necessary measures to help prevent it.

6. The fed has more flexibility in this cycle due to budget surpluses, which were not available in prior cycles.

Reduced government spending is one reason we are where we are today. I believe that is about to change with Bush at the helm. A combination on increased government spending on things like the military, decreased taxes and increased liquidity from lower interest rates will all converge together soon. I don't believe one should be out of the market during this time period.

The time to buy a sector like tech is when it's out of favor. We are now hearing comments like the sector is dead until 200?, which is bullish to me. It's very hard to pick a bottom, and in today's investing environment, sector sentiment can change on a dime.

Jim
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