Market Gems:Stocks w/Strong Earnings and High Tech. Rank Message Board

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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank

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To: kendall harmon who wrote (93570)	4/16/2000 1:49:00 PM
From: Andrew G.	Read Replies (1) of 120523

A 2.1 trillion dollar loss in market cap in 1 week does effect the economy: Abby Joseph Cohen said: ``I think what we have seen is very much a market event rather than an economic event,' Cohen said. ``As we take a look at our expectations for earnings, economic growth and so on, really nothing has changed over the past two weeks.' How could she state that in full honesty ? Chicago Tribune: "If the sell-off develops into a grinding bear market that eats up much of the wealth people have amassed during the Clinton years, it could curtail consumer spending and sharply slow the economy in an election year." From Minneapolis Star Tribune: Lee Kopp of Kopp Investment Management "There's something like a trillion dollars in money market mutual funds waiting on the sidelines" How much of that money 'on the sidelines' will pour into the market in relation to how much will come out due to more margin calls and general fear and panic ? A sustainable bounce is highly improbable as much of the wealth used to buy stocks has evaporated with stock valuations and much of the income that will be earned in the weeks and months ahead will be redistributed to safe havens: cash, bonds, gold, etc. while the threat of higher interest rates, and inflation looms ahead. What is considered 'bargain prices' now is only in relation to where stocks have been under perceived conditions of a favorable or bullish market. We are no longer in a bull market. Conditions have changed and prior valuations are not desirable under these circumstances. No one can be certain what market values should be and this uncertainty leads to doubt and the unlikeliness of a strong or sustainable rally until the economic metrics improve. After 5 consecutive interest rate hikes we get the numbers we had on Friday. The Fed has only one mechanism for dealing with that, which is to raise the rates further. My approach to investing and trading will now be to focus on one-day news driven moves in individual stocks while remaining fully aware that a 10-30% gain is more likely than a 50-100% gain that we often see with major press releases. IATV had a major news release Friday. It got into positive territory briefly and capitulated. I expect to see this sort of thing happen to many stocks that would otherwise be gapping up on what could be considered great corporate news. Best of luck to all on Monday.

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