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Strategies & Market Trends : The Art of Investing

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To: Sun Tzu who wrote (764)	9/12/1999 9:38:00 AM
From: jttmab	Read Replies (3) of 10713

Any sightings of Sun Tzu? The Naz, I hear is up some 100% since last October, 29% for 1999 [16% in the last month] and set a new high. Intraday it was pushing 2900. Friday the DOW sold into the market close. I found a sense of "discomfort" in the equities on Friday. The stocks I had been following have generally been trading in rather low volume and the DOW and S&P were pretty well flat for the week. NAZ volume was reasonable strong on Friday while the NY was pretty weak. So where was the Labor Day rally? Next week? My guess is that there won't be one this year. Investor emotion: Bull threads that I read this weekend were about as bullish as I've seen. No one seemed to be using the words "consolidation" or we're in a "trading range"...UNABATED OPTIMISM! The Bear Threads...it was truly sad reading...One staunch Bear talked about the NAZ drop on Wed as..."a buying opportunity" and suggested in one post that he was beginning to think that the only thing that would bring the NAZ down was tactical nuclear weapons another Bear responded, despondently, that it [the nukes] would somehow be interpreted by CNBC as good news! Puts and shorts on EBAY have not done well for this group. I did a quick scan of the stocks I follow...Outside of a couple of "value stocks" I think the lowest PE was 40 and the highest was 1300! This ignores the equities that have negative earnings. Y2K: I was watching international and US markets trying to gauge how the MBA's are handling Y2K "uncertainties". It looked as if there was hesitancy going into 9/9/99. It could very well be coincidence but all the markets were soft on Wed and generally down. I also noticed that on 9/9/99 there were 3 members of the Fed that had scheduled speaking engagements spread throughout the day. Again, very well could be coincidence but I wonder whether that was planned; in the event that there were major corrections in the markets on Wed, the Fed was prepared to offer soothing comments. Of course, no disasters were in the making and the Fed continued with their typical, paraphrasing, the economy looks good, we're watching inflation carefully and maybe we'll raise rates and maybe we won't. Sept and Oct are typically the most volatile months and I've had some nice returns for the year and particularly for the last month....so Friday PM...I cleared out the margin and went to 75% cash. Pretty drastic perhaps but with the techs up 29% and even the bears sounding bullish I'm guessing the topside to be limited [I may miss a few points] and a significant correction may give me a buying opportunity. When I look over the NAZ charts of recent years mini corrections seem to be around 7% down and signicant ones around 14%. I doubt that the NAZ could blow through 3000 this year and a 14% correction on the NAZ [from 2900] would give us an opportunity at 2500. Best Regards, Jim P.S. Value Investing: I'm pretty sure that value investing (or undervalued stocks) means that you buy equities that no one else wants; a value stock may continue to be a value stock for years.

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