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Strategies & Market Trends : Value Investing

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To: Bob Rudd who wrote (9048)	11/29/1999 12:18:00 AM
From: James Clarke	Read Replies (4) of 78596

Probably shorting QQQ (Nasdaq 100) tomorrow at the open. (Friday close - 155) Given my track record of shorting, if you want to make money you should probably buy call options on it. What I see is an index that has had a parabolic rise in the last month on top of a parabolic rise in the last year, which built on top of a big run for the last five years. That's what the mother of all tops looks like to me. The largest components of the index trade at P/E multiples ranging from 50 to infinity. The largest component of the index is being hit hard by the government, but the stock price has yet to react (or maybe its down an eighth). And EVERY institutional investor I know of thinks if you don't own these stocks, you cannot outperform the market, which means they are not potential buyers, they're potential sellers. Potential buyers are what makes prices rise, potential sellers are what makes them fall. And interest rates are now back to 6 1/4 and rising. Every television pundit is just bubbling with enthisiasm about this sector. You'd have to be an idiot to short it when all the momentum is against you. When something looks this suicidal, it is probably the right thing to do. We;ll see. JJC

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