re: I am just sitting here frozen unable to do anything:
You obviously didn't learn anything in 1999.
Here are 1999's successful Principles of Investing:
1. What goes up must go.........up....and up.....and up
2. earnings don't matter. Just about half of the Russell 2000 stocks went down for the year. They were the half that had earnings.
3. balance sheets don't matter. If a company funds its growth out of IPO money, and debt, its stock goes up. If it funds its operations out of past earnings, its stock goes down. The most successful business strategy in 1999 is this: sell a commodity at below cost, spend every penny you have on advertising, and be rewarded by Wall Street for rapidly ramping sales. Don't worry that losses are ramping just as fast (see Investing Principle #2, above). For the textbook example, see AMZN.
4. interest rates don't matter. Well, they do, but not for tech companies. The tech industry marches to the beat of a different drummer, its cycles don't match the business cycle, which is extinct anyway. If you could grasp this Principle, you'd understand how the Nasdaq could be up 61 points on the day the long bond rates soared to 6.62%
5. the more leveraged you are, the higher your returns. Risk is your friend.
6. the only things that matter are: the story, the concept, the buzz, the momentum. |
