<< Possibly the best opportunity to buy tech in a long time >>
... or, the worst.
Microsoft, Dell, Xerox, Apple - all new 52 week lows today...
ORCL cracked today and when I look at some stocks still holding lofty gains & still mania-like valuation multiples like NTAP, BRCM, PMCS, JNPR, MERQ - I see a trap door; if these start cracking - there "aint" no where to hide any longer. Biotech's are going down & soon imho... it amazes me as Biotech is clearly a speculative corner that some still think they can hide ?
I see lots of great shorts; but even better longs in Gold's and perhaps another leg left in Oils here... so I'll save my cash.
What is dangerous about this selloff - is that we wiped out all the speculative margin players in March-April. This is real selling; Institutional money going to money heaven here...
Think about all these iNets that went from $2 to $140 and back to $2 here; gone - history. Everytime the NAZ gets taken down like this - those gains go to money heaven; ... there is not the Institutional cash here to lift the sector ... I really think this is the "dip" & the "Black October" that brings the acknowledgement of Mr. Bear emerging from hibernation - especially with what Oil, Nat Gas and heating oil are going to do during this winters peak heating demand season; as this is not even factored fully into the markets as yet...
Wait untill all those Q3 quarterly brokerage, 401K & Mutual Fund statements come out... then; let Oil spike, or let Black October tax loss selling rear its ugly head & start a massive mutual fund outflow... then let the "I" and the "R" words surface with regularity on Bubblevision - inflation & recession...
I pray Greenspan cuts rates to save the US equity market... can't simultaneously float the market bubble & the dollar - Gold wins either way; probably on the collapse of both.
This money & credit pump created a bubble and now that bubble must also bow to the law of gravity. I wouldn't be surprised to see the NAZ test the 2000 range before this is all over.
Again; if the S&P merely returns to 1990-esque valuation multiples - it gets cut in half from here... Tech is NOT cheap - it is still outrageously valued by any sane historic metric. - we aren't even near where Greenspan called the market irrationally exhuberant...
It amazes me that ordinary people don't realize that Wall Street plays with OPM - your "OPM".... when Greenspan talked about irrational exhuberance - where were we compared to here ? When Buffet talked about refusing to participate in this new paradigm tech-mania; where was common sense ? When Julian Robertson closed up shop, when Soros & Druckenmiller capitulated, when Shopkorn walked, when "whiteboard brain storming sessions" became Multi-billion dollar dot.com IPO's and became worth more than Internationally known Indudstrial Giants - where was sanity ? When $30 Oil arrived and we still saw the Kudlowites on the "Boob Tube" looking the camera in the eye and telling us Oil, food & energy and certainly Gold - no longer mattered - that this is a new productivy paradigm - did you remember that figures lie & liars figure ? Where were the red flags & where was the mad rush to the exits ? - truly the madness of crowds...or, at least Deer in headlights...
There's another Russia, another Longterm Capital, another Brazil, another derivative crisis etc out there - I can smell it ... we "aint" seen nothin' yet imho...
Gold/Silver/PM Mining stocks (maybe a little physical silver) Cash & a little Oil & Gas; tight trailing stops...and lots of patience & discipline.
Hell; CNBC trotted David Dreman out tonight.... a true dinosaur - a posterchild value investor on bubblevision - whodathunkit ?
18 mos from now; people will be writing articles showing the classic head & shoulder blow off charts on the NAZ & Tech and wonder; what were people thinking... they just sat there & got decimated - gave it ALL back... it was right there in front of them ? - classic danger signs on all the charts ? Historic valuation multiples ? $30 Oil ? A propped up US Dollar,a manipulated Gold market, a propped up equity market - the ESF, tape painting etc.
But; how many walked away in 1928 and bragged about how they sold too soon ?
One would have to think that the end to new paradigms, mania's & bubbles - allways comes hard & fast and when people are in denial it's occuring. It seems to me - the only gameplan to ever walk away in time once you acknowledge this is a purely momenteum oriented mania - is to exit when exiting is still nearly completely against the grain... hell; we still might only be half-way there in the NAZ (5000 back to 2000 - with 3500 the half-way point)?
To be a "tech-dip" buyer here; one must ignore the valuations, the technicals and virtually has to believe that "Bear Markets" no longer exist and that Greenspan is Santa Claus & the Lone Ranger combined and that he'll allways bail us out - that we can't loose... all dips are followed by Greenspan/Fed bail outs - aren't they ? |
