Rarebird....when I talk about the market, I am primarily talking about the Naz, and specifically, leading tech stocks..companies that dominate their niche and earn money...
Although I understand your point about preserving capital, it would be truly novel for investors to stay in cash too long....it did not occur (long) when Asia was falling apart (1997), nor in 1998 (when LTCM and Russia-defaults), etc...Greed is also a powerful factor....I think the more realistic problem (for tech stocks) going forward- is "safe haven" stocks (drug, utilities, etc) vs. tech stocks...
I don't believe that the we need to see the whites of Greenspan's eyes on rate cuts before we see a rally....rather, we just need some good news for a change...there has been a preponderance of bad news for weeks...
Re: safe stocks vs. tech stocks. I certainly believe there is a limit to remaining in safety. Most of the factors you mention (Euro, slowing overall growth, etc) will disproportionately hit "safe" stocks' earnings vs. tech companies (again, I am talking top tech here)....Although energy prices have remained higher than anyone predicted, most experts are calling for $ 25 oil by early next year...since the market front-runs, I think the energy question will be sorted out soon.....
Relatively speaking, though, if the money is going to remain (in stocks), as I think it will, I think the premier growth tech companies are going to continue to look attractive vis-a-vis almost any stock...their growth rates are spectacular, unyielding, and the stocks are cheaper than in a couple years or more...
Re: CMTN...it will be interesting to see how much their business is slowing...but I think it is not accurate to say some of that slowing is not already priced into the stock...lot of negativity in the stock already. A lot.
Finally, the Naz is down 10 out of the last 12 sessions. It has closed down 5 weeks in a row (Monday-Friday) basis....Over the past few years, I am unable to find any stretch in which the Nasdaq has performed so poorly without some sort of rebound....so, even if we hit 3200 early in the week, I think the odds favor a bounce by the end of the week...by then, we will be in full earnings season...and will remain until late October. Then, we enter the historically strongest period for the Nasdaq, November-January. Although I am not expecting a rally as in the past few years, it is reasonable to expect recovery over the next many weeks.
Currently, we are the most oversold in 2 years. That makes me feel a bounce is in order. |
