Perspectives: -
for 1 1/2 years, no one cared about real stocks with real earnings. they were laughed at, dumped, mocked, while we slavishly chased the nets and techs with absurd PEs and had to invent price to sales ratio to even quantify them. Now, perhaps, the other shoe has dropped, and it is the nets and techs that are not getting any respect, at least not until a lot more fluff has been ripped out of them.
Perception is reality. While we all were living the dream of higher prices and nas zooming, life was great. Now, apparently under a different set of circumstances, many of us have not been able to adjust to the new playing field, and have seen last year's profits decimated and likely sizeable losses in this years performance. and yet we still chase the yhoo's and qcom's and cmgi's and other stocks with astronomical pe's or psr's or whatever ratio is in vogue.
Probably what distinguishes a smart trader from the rest of the crop is his/hers ability to ignore the past and just concentrate on what is in front of him.
It now seems SOOOOOOOOO obvious, that financials, good retail, baby bells, "real" stocks are the place to have sizeable chunks of investment or trading assets. It is NOT the time to be 40-60-80-150% in nets/techs/bios. Last year it was, right now it isn;t. IT IS NOT FUN BUYING A $158 stock and see it go to $140, and now, fear its going to $120 or 100 or wherever, as opposed to expecting it to bounce right back and then higher.
I am as guilty as the next. My reaction on watching INTU plunge 8 points was to buy more. Is it likely to reverse on a dime and go back up . NOOOOOOOOOOO. So why did i buy more? DUH. Why did i not want C - Citicorp, with beautiful chart and 20 PE, or a BAC with an 11 PE and a 3.8% yield, still 20 points off its high. too stodgy. too safe?
Well, enuf. I'll make a deal with anyone out there. If someone would like to kick my butt, i'd be happy to kick theirs. Larry |
