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Strategies & Market Trends : Rande Is . . . HOME
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To: Rande Is who wrote (25060)4/30/2000 3:09:00 PM
From: john722  Read Replies (1) of 57584
 
Rande . Do You Still Stand By This

post of yours (seems like you have recently changed your
position. If so, please enlighten us to the reasoning behind
your change - thank you)?:

To: Joe Lyddon who wrote (23733)
From: Rande Is Wednesday, Apr 12, 2000 11:25 AM ET
Reply # of 23743

Joe, in my opinion. . .tech stocks will continue bouncing off the ceiling. . . . the ceiling will not just keep going up as it has. So seasonal buying will beat buy and hold.
For example, CSCO is at 184 times earnings. . . .it isn't headed for 500 times earnings. . . . it will remain in a "trading range" of sorts in the long term of lets say between 100 and 200 times earnings.

BRCM is at 461 times earnings. . . and I believe it will remain in a trading range as well. . . . buying here for a 2 year hold with hopes of a double. . .assumes that it will reach 922 times earnings. That is a pretty risky bet. Whereas, waiting for it to reach 200 times earnings and playing it to say 350 times over and over would theoretically yield gains. . . . whereas holding may actually show losses over time.

Yes, I am weighting my examples to make a point.

But consider this. . . in order to buy and hold a tech stock here, you must believe that price to earnings ratios are fair and the stocks are valued fairly. . . .in other words, you believe that earnings will continue to rise in a dramatic way, thus justifying ridiculous valuations. I think that buying and holding techs is playing too risky. . . . whereas trading them is far less risky.

Now, as for those socking their money into stocks and mutual funds. . . .they had better take an active interest in their holdings. . . .or their returns would have been better at their local savings and loan.

I believe techs will sell off further than most others can even imagine!! 60 to 80 percent selloffs of many tech stocks would not surprise me in the least.

For example. . . . I'm looking for VRSN to hit 80 [nearly 70% from high]. . . .AMAT to break 60. . .CSCO to hit the low 40's. . .RMBS back under 100 . . . a drop of 75%. . .CIEN to 60. . . INKT to 65. . .QCOM to 65. . .AMCC under 50. . . VIGN under 50. . .TERN back mid-40's. . .INSP back below 30. . .PMCS back to mid 60's. . .JNPR to touch 100. . . CMRC back under 60. . .same with AKAM. . .and CMGI. . .BVSN to 19. . . MMPT to 12. . .CORL under 5. . .JDSU and A to 60. . .ARBA under 40. . .

Get the picture?
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