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Strategies & Market Trends : Rande Is . . . HOME

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To: Rande Is who wrote (33135)	8/28/2000 4:57:24 PM
From: American Spirit	Read Replies (3) of 57584

Beg to differ (a little) Rande. On the computer services sector (CA, BMCS, UIS, NOVl, IFMX, CPWR etc.) that's been hammered down 60% or more lately after a slow post Y2K first half, the writing is on the wall thanks to IBM taking the lead (IBM a company they all rely on) and the institutions which unloaded months ago are now accumulating. Or somebody big is. For instance, almost every day for the past two weeks UIS has gotten big block buying at the end of the day. All the others are in the same boat. What I think is happening is that the big buyers are loading up cheap (but quietly) so that the entire sector (again following IBM) will be upgraded in September reporting and expecting a robust 2nd half and beyond. It is obvious that the Y2K fix-it expenditure drained the out-sourcing budgets of many companies for the past year. Now as IBM rolls out new mainframes and many deals have been delayed, the business should start booming. I've told you I sat next to an IBM on the plane recently and grilled him. He stated they are getting way too many service orders from all around the world and don't have enough bodies to do the jobs. An increasing backlog. What this means is that the second tier companies will get more and more business as well. And with drastically-reduced expectations you can bet that they will pop through the fall. The little moves 10% or so in these stocks are nice but I'm holding on for the bigger profits. Too many times I've scalped a recovery play and regretted it later. This time I'm holding on. Although sure I may trade in and out a few times on really big pops to resistance levels. But I'll always be ready to buy back. Another tip. I'm watching TOM. Bought a little today. This stock hasn't done much lately and retailers didn't participate today. This stock sells for 50% of one year's revenues. And what I hear is that they are aggressively re-re-designing. A comeback play which could maike you 400% or so by spring. My nemesis ANF went to 9 and has already more than doubled from the bottom. TOM has not doen this - yet. Continue to like telcos a lot and am holding those until they get back to fair value. After labor day everyone comes back from holidays and there should be much bigger volume. I'll be watching for an overbought condition in the market but we should see a surge. Remember all of Europe is on holiday in August too so global stocks like LU, IBM and UIS for instance should benefit. UIS by the way gets 65% of revenues from overseas. And another reason they had lousy profits was the strong dollar which is now coming back down last time I checked. Lastly I still see ELNK as a steal and of course ESHR. ESHR is throwing a convention in a month. They have so many deals with so many major companies but have not had any PR lately. That could change soon and I see that as a possible double-bagger short-term. The bigwig Wall Street honcho just on CNBC said it right. Watch out for technology over-valuation to sell, but also watch out for tech over-valuation to buy. It is a two-tiered situation now. Value stocks are still down near 52 week lows. High-fliers are making new highs. Except for IBM and a few others I'd be cautious about high-fliers. They are priced to perfection. Some of the tech dogs are priced as if they're going out of business which of course they're not. Just tuhjink for instance what happens to UIS at PE 7 if they beat estimates next Q. I'm holding on. Every dog does have its day.

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