Anyone see any holes in my logic or facts
Real interest rates are near an all-time high of 4%+(historically they have averaged around 2-3%) so if anything, the Fed should be thinking of loosening, not tightening, the money supply. One of these days the market will recognize this fact.
The PEs of CSCO, AMAT, INTC, etc are still at their all-time highs,
What of it? If you had used this logic any year for the past decade on companies like MSFT, DELL, CSCO, and had gone short, you would have had your head handed to you. The trend for IC penetration is only growing stronger. Why would you bet against this? We are at an historic inflection point, yet many Bears fail to see the writing on the wall, thinking they know better. Somehow this strong technology trend will revese course!! What arrogance they have! Opportunities like this do not present themselves often. America's technology infrastructure companies(AMAT among them) are the nexis through which all countries will come for the forseeable future. Your strategy may make you money in the ST, but would probably have been a better one when the Dow was at 11200+
BK
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