William, when a market crumbles on fundamentals of its economy, you can generally smell it coming for months. So it is no surprise when it arrives. In fact, I called the October 97 correction to the day. It was pretty obvious. That was on fundamentals, yet it surprised me and bounced right back. . . what I am smelling here is not bad fundamentals. . . its something else. . .if you know what I mean.
I don't think anyone truly believes that we are headed into serious inflation. . .nor do I think anyone really believes that a recession is around the corner. . .which would be implied by a crash on fundamentals. Rather, I still believe that this was an orderly seasonal correction. . .and that it served its purpose. Consequently, I think that we will rebound. . .if not quickly in a bounce scenario. . . then in the fall, when the traditional tech season begins anew.
The brokerages need the tech season for their investment banking and IPOs. The hedge funds and many mutual funds are now heavy with cash. . .and are licking their chops over some of the new PE ratios created by the past weeks dumping.
And just like last summer, I don't believe there is sufficient reason to keep the best tech stocks down for good. However, also like last year. . . many tech stocks simply will not rebound at all. . . and some will even continue to decline. . .even some names we've all played or heard about. . .will fall completely off the Nasdaq into the OTC this year, in my opinion.
Yes, we had an overextended bull market. But I believe it took a healthy dose of its medicine voluntarily. . . .rather than continuing unabated until it falls under its own weight, as in '29.
So, I believe we are now in a holding pattern. . . perhaps for a day or two. . .maybe a week or two. . .or as much as the 6 month bear market we prepared so well to withstand. Either way, doing your due diligence and buying the industry leaders with the best fundamentals, earnings, growth and prospects down here in the dumps is a play that should pay off handsomely. . given sufficient time, in my opinion.
Rande Is
PS> Got 3 unrelated illnesses at the same time. . .all flared up last night, too . . .so I won't be posting much over the weekend. . . [had to sneak one in]. . .I'll be resting until about Monday AM. |
