From e-letter today...<<Memo to Steve Ballmer, president of Microsoft: Please
don't talk about the stock market. Ever. Because what
had been a mixed day turned into an absolute rout
Thursday after Ballmer was quoted saying the valuations
of tech stocks--including Microsoft--are "absurd." Once
that story hit the wires, it was all downhill. The
tech-dominated NASDAQ took the biggest hit, falling
108.33, to 2749.83, or 3.8%. The Dow plunged 205.48, to
10,318.59, while the S&P 500 sank 30.10, to 1280.41.
Here's what we've been following:
TECH TUMBLE (Part 1).... Given the NASDAQ's huge run-up
lately, it's not that surprising that many of the
biggest names came down so much. Still, it was pretty
ugly: Ballmer's own Microsoft was down 4 7/8, to $91
3/16, while Intel fell 5 5/16, to $77 1/2, and Cisco
dropped 2 7/8, to $69 3/8. Internets didn't do much
better, with Yahoo falling 5 3/4, to $173 3/4, and AOL
off 3 1/2, to $87 1/2. Personally, I think anytime
you've got high-quality names like Cisco, Intel, or
MSFT under pressure, it's a buying opportunity.
Especially Cisco.
PMC SIERRA TAKES A DIVE.... Did you see what happened
to shares of PMC Sierra? They got slammed on fears that
damage to semi foundries in Taiwan would hurt upcoming
profits. It all sounds pretty speculative to me, but
shares of PMC Sierra sank 11 3/16, to $88 5/8. PMC
Sierra makes specialized chips for companies like Cisco
and not surprisingly, demand is red hot. I bet PMC
comes back pretty fast.
DOW 10,000 REDUX.... Although I tend to be bullish in
the long term, I wouldn't be surprised if the Dow dips
below 10,000 in the next few weeks. This time of the
year is often tough for stocks (just look at 1997 and
1998), and the upcoming Fed meeting is only going to
exacerbate interest rate jitters. If the market does
break the 10,000 barrier, expect it to generate big,
bearish headlines. For long-term types, however, I
don't think it means much.>> www.fortune.com |
