GST,
The idea that tech stocks will be OK is not from the broker. It is my invention (in the same way Al Gore invented the internet). If crude went up, who will come to the rescue? Tech with their seismographs, etc.... If labor cost went up, automation, robots, and so on.
In the last major scare from labor cost when the now discredited concept of NAIRU (sp?) was still in use, the market would sell off whenever the employment numbers came in strong. And I used to max my margin in buying. It worked every time. I think this time too.
I agree that stocks with ridiculous P/E will get hurt. But now taking a turn to investor psychology, someone like Yahoo can obscure the issue of P/E with growth. I think it will still work, though I wouldn't go on margin for it.
And another thing. There is NOT going to be 7 rate hikes or whatever. 7% long rates are more than enough to shift a lot of money to fixed return investments. The REITs will get killed, but SUNW, INTC, ORCL, LSI, etc... will do just fine. By the way, I also bought 100 msft today. So you see my conversion is complete. Now where is that book on scientology... |
