The Bull Sector - bullsector.com
Bear Market!
Well, it's here, we didn't want it, or even want to accept it, but we have
officially entered a Bear market. This has been a wide spread sell-off.
The Nasdaq Composite Index that set a new record high of 5048 on March
10th has now dropped 35% in a little over a month to close at 3,321.29 on
Friday April 14th, 2000. Even the Dow itself is down 9.3% after recently
showing strength. That strength has been sapped by margin calls and a
rotation into cash. We believe the Nasdaq will find support soon but it is
not likely to happen until the index falls well below the 3000 level.
Will see a long-term downturn or we will see a recovery soon? The overall
bearish sentiment and the volume of the selling in the overall market on
Friday encourage us but we are discouraged when we look at the traditional
valuations stocks. We believe that is it highly likely that we will see
another few hundred points lost on both the Dow and Nasdaq as early as
Monday morning. The biggest reason we expect this to happen is continued
margin calls. The second reason is fear of a very real slowdown in the
economy brought on by higher interest rates as the Fed reacts to the
higher than expected CPI numbers released on Friday. The final reason we
are concerned is quite simply that a Bear market downturn like this simply
eats up available investment dollars. Too many investors are no doubt over
leveraged to withstand the current downswing without having to sell off
positions in numerous stocks. This week we watched stocks sell off in
every sector leaving only the gold sector higher on Friday.
cbs.marketwatch.com
Certainly cash is king. Long-term bargains will be available for those in
a position to buy.
The question is what do we buy?
That is an individual decision but buying quality will be much more
important now than it was two months ago. Next week technology leaders
like Intel, IBM and Microsoft are scheduled to report quarterly results.
Future earnings expectations for these companies will weigh just as
heavily on the market as the companies actual earnings. We believe that
when money begins to flow back into the market it will happen much more
selectively. Stocks that have actual earnings and a habit of exceeding
analyst's expectations will prosper but those that have risen due to
market share or Dot Com mania will be much more subject to falling back
after any rallies. As for those companies with actual earnings, well we
believe it will be even more important than ever for companies to live up
to expectations.
There are a number of companies that reported earnings this week that
actually exceeded analysts expectations. In this market most of these
stocks sold off too but they will be more likely to recover than those
companies that reported disappointing earnings. This market correction may
actually offer a tremendous opportunity for investors to pick up bargains
on actual market leaders in numerous technology sectors. We believe that a
recovery rally could take place soon. It could begin late Monday or
perhaps Tuesday when the market selling reaches feverish heights. If that
rally comes we will be looking at reassessing our own portfolios to buy
market leaders in various sectors.
Relative to the recent past bargains can be found everywhere so why not
buy into market leaders? It's time to look at those stocks that have
consistently beaten Wall Street earnings estimates. Take some time and
look through the Yahoo Detailed Quotes charts at the Bull Sector. Look for
those charts and sectors that have withstood this sell off relatively
well. These stocks are likely to emerge as the real winners on the next
leg up.
Monday morning may very well be incredibly ugly we hope all the readers of
this message will not only survive the additional selling but also soon
find themselves in an excellent position to prosper. Here are some stocks
we like in the technology area. ATYT in the 3D Graphics Sector
bullsector.com
The PC Hardware sector still looks pretty solid. Stocks like IBM, SUNW and
HWP look like great long-term investments. GTW exceeded earnings estimates
this week. We also have great faith that DELL will reassert market
leadership the PC Hardware Sector even as it successfully branches out
into new vertical markets.
bullsector.com
Both CHKP and RSAS reported excellent earnings this week in the Internet
Security Sector.
bullsector.com
Database leader ORCL has held up well and can be found on several Bull
Sector Lists. Along with ARBA we like ORCL as a leader in the B2B Sector.
bullsector.com
CSCO has held up well for good reason as this leader in the Networking
Sector rarely disappoints investors.
bullsector.com
ADCT is a company with a tremendous customer list in the Telecom Equipment
Sector. The chart still looks good.
bullsector.com
In the Semiconductors area there are several stocks that look quite good.
Although the sector was hit hard on Friday this is an industry that
continues to show tremendous growth. AMD for instance reported excellent
earnings this week. AMAT, TI and many other stocks look fundamentally
solid in the Semiconductor Sector.
bullsector.com
How about Wireless plays? There will be some real winners in this sector
in the future. Right now we would like to have the cash to buy stocks like
GTE, LU, NT, and QCOM to take part in the long-term success of the
Wireless Sector.
bullsector.com
We continue to add new micro sectors at the Bull Sector. Old economy
sectors are represented as well as new technology sectors like the
Telematics Sector. Strategy Analytics expects that the world market for
in-car telematics terminals will grow from $7.7 Billion by end 2000, to
$24.3 Billion USD by 2006, with North America taking $9.4 Billion of that
market. The FCC has said that cell phones themselves must soon have E911
skills. JCI is one stock that might do tremendously well with the growth
expected in the Telemactics Sector.
bullsector.com
Disclaimer: Investing in stock market can be extremely risky. The authors
of this site are not connected with the financial industry and nothing
here should be construed as giving financial advice. Prospective investors
should contact a suitably qualified financial advisor. No warranty or
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this page, and under no circumstances will the author or service provider
be liable for any loss including but not limited to direct, indirect,
incidental, special or consequential damages caused by using the
information, or as a result of the risks inherent in the stock market.
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