t2,
I still believe that until they shoot the last two guys standing (EMC and SUNW), the tech bear market won't come to an end. I was lucky to get out of JDSU for a trading position yesterday at about 103. Fiber optics are a pure momentum play. When there is a little piece of negative news, issues will get killed in this market.
The bad thing is that JDSU still looks very expensive by traditional valuation. When you want to turn a momo play into a value play, you are in big trouble.
JDSU will probably come in with 16-17 cents, and the best hope for revenue is in the high end. That will propell a little relief rally but will definitely be short lived. Fiber optics 2001 will be telecom 2000, underperforming the market.
I have total respect for CSCO. However, I am getting very uncomfortable with the technicals of this issue. A retreat to low 40s within the next 6 months is basically inevitable.
We are in a true bear market. We entered the second phase when they shot the nut sector. I don't give a damn about the overvalued nut sector. However, the concept of rich valuation we are giving to the premium companies come from the ridiculous high valuation models of nut issues. When nuts crashed, investors sentiment got a huge blow and probably their confidence was also shattered. One by one we see the rest of the high tech sector got shot for no other reason but a retreat to historical valuation, and we still have a long way to go. Nastaq 2800, and even 2500 is likely in the spring of 2001.
I think that biotech will probably be the next bubble play in 2001. No doubt 95% of those issues will see their market cap dropping 80+% from current level in 3-5 years. However, they can get much bigger before they lose steam.
good luck,
larry! |
