It's very possible that both Bulls and Bears are right, especially as regards leading tech stocks: Compared to where INTC probably will be trading when Joe Investor reaches retirement, or even where it'll probably be when Joe Investor agrees to help pay for his mother-in-law's in-home care or Joe Jr.'s grad school tuition, there are good gambler's odds that INTC is, indeed, a major buy here. On the other hand, there's not a bad chance at all that it'll be an even better buy, maybe even a radically better buy, next week, next month, next Q, or even in the year 2005.
J.I. doesn't, however, expect to grab INTC at its deepest bottom, or to turn it around repeatedly, up and down, or ever to go short or buy a put on INTC or ANYTHING... Indeed, J.I. may only vaguely understand what "short" is, be unclear about how one gets that way, and may not have even the slightest idea what a put is. More to the point, I think that deep down J.I. also senses that the only way for INTC not to be a good buy here (if not the best buy, especially if you were hoping to get a P-IV at Best Buy, but that's another story), would be if we're heading for something a lot worse even than an average Recession, or even worse than the 70's grizzly. If that's to be the situation (Depression, worldwide revolution and realignment, polar ice-cap meltdown, explosion of the Sun, etc.), then J.I. knows that he, his mother-in-law, Joe Jr. and quite probably even all the smarty-pantses and nervous nellies who are avoiding INTC here (or MSFT, or SUNW, or ORCL, or etc.) are going to be pretty royally screwed, and regardless of whether Joe averages down, buys Sysco instead of Cisco, buys bonds instead of stocks, buys gold instead of bonds, invests in Joan and Jake's new hamster-fancier's web site, or stuffs his mattress full of greenbacks or any other currency. In this sense, from J.I.'s perspective, for INTC and the rest of the American and international technological and financial superstructure not to be, all things considered, a buy, J.I. would have to be contemplating a new era in which, contrary to the previous history of the U.S. stock market, the basket of leading growth stocks would on average decline, or, to be more precise, fail to appreciate at a rate greater than avg. interest minus inflation.
Sure, it could happen. Our era's version of the Nifty 50 could do even worse than the old Nifty 50 (which, bought as a WHOLE, contrary to the sense of recent publicity, may relatively speaking not have been a bad investment at all). We could be on the verge of the Great Regression to the Mean, and even J.I. may, if only in his nightmares, acknowledge the possibility that INTC will never, ever be a good buy again, but contemplation of that larger world-historical turn of events would require of J.I. not just that he re-conceive his investment strategies, but that he re-conceive his very identity as a patriotic, optimistic, democratic capitalist American.
That's a lot to ask of J.I. In the end, he might prefer to vote his money for the happier alternative, even if someone somewhere could prove to him that it was not a sure thing. |
