Yes, perhaps Dell can use this to their advantage. They certainly seem to be able to adjust quickly to a lot of different circumstances. We'll have to see if these latest tremors in Taiwan lead to more damage, and perhaps greater shortages.
It was good trading opp in Sandisk, but I think another will occur. I think a base gets built here, which will be fine for the stock longer term. If the market gets hit, we may even see another opportunity in the 30s. Actually, I wouldn't mind that. I too missed the last one, I put in a chicken little order to buy at 36 but it didn't get quite that low.
My cash level is about 50% now, partly due to declining declining stock prices, unfortunately. I sold off the wrong stocks--the higher priced winners which just kept going up, and kept more of the "cheaper" ones which either held steady or went down. However, I do think that there will be another leg down. But first a leg up in early November, there should be a sigh of relief rally that October ended. People will wait to see how the employment numbers and the basic inflation numbers look, and what the Fed does. If they tighten in Nov., and the economy is still strong, then we go down some more, perhaps a lot more, for fear of still more rate increases, plus the "3 steps and a stumble" mantra will be repeated ad nauseum. If they tighten and the economy looks weak, then we go down due to a weak profit outlook. if they don't tighten but the economy looks strong, we still go down because of fear that they'll tighten once Y2k is out of the way. If they don't tighten and the economy is weak, we still go down, again because of profit fears. And Y2K scares will make people timid in any case, I think.
So, in my glass three quarters empty view, we go sometime in Nov/Dec, and perhaps very sharply. No way can we stay above 10,000 forevermore. But neither will be the end of the world. Yeah there is a little bubble in some equity pricing, and probably also in some real estate pricing in some of the big booming cities. But the outlandishness isn't that widespread. I still think that the Fed could relieve a lot of this by getting margin requirements increased (do they set that or does the SEC? I'm not sure, but I am sure that they would work together somehow), and they could relieve some of the real estate bubble through some constaints on bank residential lending. I'm not sure how the latter would constructed since I don't know the mortgage mortgage market very well, but I'm sure it could be done in a way that wouldn't hurt people who were buying houses under, say, $150,000 or $200,000, but would limit some of the wild speculation that goes on at the higher end of the market.
Best,
Sam |
