How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 476.24

+0.3%

3:59 PM EST

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To: ed who wrote (26556)	7/18/1999 2:53:00 PM
From: t2	Read Replies (2) of 74651

Ed, I don't think the fear about Y2K is really about the computer glitches anymore. It has more to do with the general public's confidence in the financial system. Will people feel confident about their mutual fund balances being correct----or might be worried about their funds getting deposited in someone else's account. A lot of this may happen (selloffs in the markets) simply by people changing their mutual fund portfolios to be less weighted in equities. Once you get a lot of these people feeling the same way, it will feed upon itself. This time the hedge fund managers will feel more confident going short if they sense the average individual is fearful. I want to be about 30% in cash and maybe even 30% bonds and the remaining 40% in equity (mostly MSFT). This would be for my non trading accounts. However, there is one person (or organization) that can prevent a Y2K related stock market correction. That is Alan Greenspan and the FED. If they sense a lack of confidence in the markets, they will proceed with serious interest rate cuts to ensure there is no panic. You could be right that there is nothing to worry about. However, as an active trader, i am becoming defensive. This is also the period when the market tops and starts heading downward anyways. If we get a big enough correcting going into October, there may be no Y2K panic and a rebound could start late in the year followed by record highs by January/February. I think we will be at record levels by February or so----but the road might be very rocky. I plan to take advantage of the volatily and play it both short and long (in my margin account) with the finale being going very long at year end. I love to time the markets. If i screw up, i might stop but not until then. In conclusion, i think we will be at record levels by February but i am expecting to see some big declines along the way. Remember one thing going into October this year----there will be lots of the usual reasons given for any selloff but the Y2K will be newly added to this equation. That is what could cause a crash. I read recently that the markets will now have to drop a lot before trading is halted (recently changed limits -- i think). That is not going to help.

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